Smart investing is only part of the picture. At Acquira Wealth Partners we understand that planning & strategy are equally important.

The role of planning is to help you understand your current position, define your goals – or where you want to be and set out the action steps to get there. It provides a clear focus for the many decisions that will need to be made.  

Tax Planning

Strategy is simply doing things smartly. Simple things like considering who should own an investment; individually, jointly, company, trusts or superannuation can make a big difference, not only during the investment but importantly when you come to sell.  More complex issues like gearing, using superannuation smartly and other strategies can save you (and your estate) significant amounts of tax and help build your wealth to achieve your goals.  

It is important when developing a taxation strategy not to get caught up with doing something simply for a “tax deduction”.  There are many good investments that provide tax benefits and when these are integrated into your overall financial plan you can gain maximum benefits.

Growth Investments vs Income Investments.

When it comes to investing, from a tax perspective – growth assets provide some distinct advantages.  Assets that only produce income, such as savings accounts and term deposits need to have their income included in your yearly tax return and come with no offsets.  Because all of the return is taxed each year,  you loose between 21% – 47% (depending on your tax rate) and this means you do not get the true benefit of compounding.

However when you invest in property or shares you still receive income that needs to be included in your tax return, but you are able to use legally allowable tax deductions to offset the rent on properties and many shares have franking credits which can be used to also reduce the impact of tax.  In addition to receiving tax effective income these assets also have the ability to grow in price.  For example, the cost of the median house in Brisbane in 1980, was $38,795* and the All Ordinary Index was 546 ^.  When you invest in growth assets that gain the benefits of compounding you don’t have to declare or pay tax as the investments rise in value.  Owning growth assets also means you can time when you do eventually sell, and then capital gains tax provides 50% of the gain tax free (assuming you have held the asset for more than 12 months).

In isolation, it can seem that tax planning strategies only provide minimal benefit, however when combined together and given the benefit of time, reducing tax will be one of the most profitable strategies that you can employ.  To start your tax planning today call to make an appointment.

*Source:, March 2014
^Source: , 01/04/2014