Preparing for EOFY: Real Client Example

At Rasiah Private Wealth Management, we ensure our tax advice caters to the unique circumstances of each client. Compliance with tax laws and maximising potential savings is more crucial than ever & with significant changes to the tax rates legislated from 1 July 2024, this year there are significant opportunities for clients to take action to enhance their tax savings.

This year we have had several clients sell investment properties resulting in sizeable capital gains and therefore, by doing nothing will normally be expecting large tax bills on lodgement of their FY24 tax returns.

Tax Strategies for Property Investors with Smart Super Contributions

One standout example from this year involves a strategic approach to managing capital gains from investment property sales.

With a substantial capital gain of $60,000 from the sale of an investment property, we considered the carry-forward concessional superannuation contribution rules & recommended utilising their unused super contribution caps. By making a $60,000 personal concessional superannuation contribution, our client can significantly reduce their tax liability - saving $22,050 personally based on their marginal tax rate.

The section below breaks down these numbers further and explores the net benefits for the client:

• Net taxable capital gain of $60,000 (after a 50% discount) from the sale of a property in this financial year.

• Given the client had $60,000 in unused carry forward concessional contributions, it was logical to recommend making the full $60,000 personal concessional superannuation contribution and claiming a tax deduction by 30 June 2024.

• This ensured they would pay no tax on the gain in their own name which resulted in a saving of $22,050 based on their marginal tax rate. After the superannuation fund's tax of 15% was applied, the net tax saving amounted to $13,050 (21.75%).

• We were satisfied that the recommendation was appropriate for them, as they had the cash funds from the property sale to make the contribution, no debt, and were in their 50s. Since the preservation age is not until at least 60 and a condition of release was met, it made sense to build up their superannuation and take advantage of the current legislative rules.

Why Personalised Financial Planning Matters

This example underscores the importance of individualised financial planning. For our clients, understanding and leveraging specific tax laws can lead to substantial financial benefits but furthermore, it resonates with the client’s values of not having to worry about strategic financial decisions so they can continue focusing on what matters most.

If you’re looking to explore how these strategies might apply to your financial situation, contact us today. Our team is ready to help you navigate the complexities of financial planning to ensure optimal financial health and strategic tax advice.