Ensuring Online Signature Lawfulness for Accounting and Tax in Australia

How to eSign a document: online signature lawfulness for Accounting and Tax in Australia

these rules were made in 1986 i read the rules said what am i allowed to do and that's exactly what we've done that was kerry packer who was one of australia's richest men in the 1980s summing up his famous approach to structuring his wealth to ensuring he paid only the tax he was required to i am not evading tax in any way shape or form now of course i am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads ready because as a government i can tell you you're not spending it that well that we should be donating extra that was in front of australia's parliamentarians in 1991. welcome to another video with money with dan while you're on the path to accumulating wealth and looking at ways to maximize your returns remember to think ahead at what the tax treatment would be to ensure you two are maximizing the after tax return in this video i'm going to share my best tips on how i structure my australian tax affairs to ensure my wealth is organized as tax efficiently as the current australian tax law allows just as kerry packer would have done if the same laws applied back then tip number one you should shelter your assets from tax wherever possible the government provides many incentives to encourage us to change our behaviors to achieve a desired goal that benefits the community as a whole the best legal tax shelter in australia is superannuation as it is taxed at a very generous low tax rate of 15 while you're working and then zero when you retire after 60. using a low-cost industry super fund is the cheapest and simplest option with low administration fees while self-managed super funds are good if you want more control over what to invest in but come with a higher administration burden however the main drawback with superannuation is that you can't access most of it until you turn 60 and retire and there may be many changes to the law between now and when you retire creating some uncertainty if access to money before you retire is important then using family discretionary trusts or small companies to hold assets may be a tax efficient option for you while still allowing you to access some of your capital regardless of age family trusts are useful for distributing any investment returns to different beneficiaries which can be ideal for tax if they are on a lower marginal tax rate than you are or your spouse individually while also protecting assets from creditors which might be an issue if you're operating a business similar to trusts setting up your own small company to invest in on your behalf is good for high income earners as taxes are capped at a top tax rate of 30 percent which is good if you're on the top marginal tax rate of 47 but not so good if you're on a lower marginal tax rate the benefit of using a small company is it overcome some of the many issues with family trusts which can get a bit complicated depending on your circumstances investing with these options can be a bit more complex and have higher administration costs but can be worth it when you have large amounts of assets to make the extra cost of operating worthwhile if you're finding this video helpful please remember to press the like button and subscribe i spend a lot of time creating these videos to help you and by liking and subscribing it would really help my channel reach more people thanks a lot tip number two shelter higher expected return assets first assets that you expect to hold in the long term which will have the highest capital gains should be sheltered first using one of the tax shelters listed in tip number one as it will maximize after tax returns making this choice before you buy will avoid tax problems later on when your investments have grown in value and you will need to pay tax when you sell them choosing the right tax shelter for your circumstances can require good advice from professionals experiencing this like your accountant your lawyer or your financial planner and is a great idea to get their opinion and is definitely worth paying for tip number three you should optimize your household finances the australian tax system is set up to assess and tax people as individuals rather than households or couples if you are married or in a long-term relationship you should be looking to maximize not your individual tax position but rather that of your entire household assets that are more liquid with low returns like cash should be kept easily accessible and outside of most tax shelters due to the drawbacks of being able to access the capital easily and quickly this would mean putting them in high interest saving accounts or term deposits where you have less restrictions and more control the best way to improve tax efficiency of cash or fixed interest outside of tax shelters is to set up the account in the name of the lowest income earning spouse while setting up access for the other spouse to still have access to those funds if you don't have the option of investing in the name of a low-income spouse or using a tax shelter then adapting your investment style to focus on growth assets that don't pay income in the form of interest dividends or rent could help you this would include investing in globally diversified index funds that yield low dividends but are diversified enough that you rarely need to sell the investment while you're still accumulating assets and you have high income outside of your investments such as your salary or wage if you're saving for your first home then the government's current first home superannuation saver scheme or fhss is a great tax shelter to accelerate your savings for your first home in a tax shelter that is accessible to people at a low cost other strategies like negative gearing assets in the name of the highest income owner could also be useful for being tax effective so long as the expectation of growth is sufficient to cover the after-tax cost of interest while the net return is still sufficient for the extra risk taken from borrowing tip number four the tax tail should not wag the investment dog this is a really important point your goal is not to minimise the tax you pay to the ato your goal should be to maximize your after tax returns these goals may look similar at first but there is a world of difference here negative gearing and investment just for the sake of a bigger tax deduction at tax time can be disastrous if that is your sole focus only you need to think of whether you are buying a good asset with solid expectations of future returns first you only need to think of the poor owners of apartments in buildings with serious defects to understand there are high risks involved that make the after tax return insufficient and there are often better investment options with higher returns and slightly less risks an example of this would be buying electronic traded funds or etfs that are well diversified and you can just accumulate them using your savings without having to borrow to invest tip number five some major taxes are voluntary capital gains tax for selling long-term investments is essentially voluntary if you buy and hold an income producing asset forever then you never need to sell and you never need to worry about capital gains tax furthermore if you ever did need to sell them then the 50 concessional tax-free amount of gains owned for more than 12 months allows you to minimize capital gains on assets compared to income from other earnings that have no tax concessions at all if these are owned in a tax shelter there could eventually be no capital gains tax such is the case currently in superannuation because when you're retired and over the age of 60 there is usually no capital gains tax long-term assets can also be inherited to your own beneficiaries at either a very low tax rate or no tax at all if you pick the right tax shelter also the medical levy surcharge is also another voluntary tax and if your income reaches the threshold where it does apply to you then you can avoid it altogether by simply getting a low-cost private health insurance policy tip number six keep it simple often the simplest solutions tend to be the right one when presented with competing theories to solve a problem such as tax you should select the solution with the least complexity as jack bogle would say complex tax avoidance schemes involving offshore activities get attacked by the ato all the time also family trust setups small companies and self-managed super funds can be very complex to set up and requires lots of ongoing maintenance provide marginal tax benefits for most people with small amounts of investments they also require high levels of annual cost to operate so ensure you are convinced of the benefit first often i find there are more simple and lower cost options available to most people that achieve the same objective at a lower cost with fewer downsides for example a low-cost industry super fund could significantly outperform a similar size self-managed super fund while the perceived difference in benefits for the average person are minimal at best or sometimes you could be even worse off as you miss out on the cheaper insurance options inside of industry super funds due to the benefit of scale and size tip number seven if you do seek tax or financial advice make sure it is from an experienced and registered tax agent who charges a fixed fee that is made clear to you up front if they promise you things that seem too good to be true then look for a second opinion before you commit to something big that you are unsure of if you're interested to learn more about tax or saving money then you can watch one of the videos on the screen right now