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Time to minimise your tax obligations

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It's nearly the end of the tax year and time to consider some last-minute planning to minimise your tax obligations.

If you've disposed of shares or any other investment for a capital gain, look at your investment portfolio and consider disposing of any assets that sit at a loss. such losses can be offset against your gains.

Be careful, though, if you sell shares at a loss and then buy them back in the new tax year. The tax office takes a hard line against so-called "wash sales". This refers to the sale of an asset before the year's end and the purchase of a largely identical asset immediately after year-end, so that the owner has a continuing economic exposure to the asset. The ATO can apply the anti-avoidance provisions to cancel tax benefits and apply penalties.

tax obligations

If you have a rental property, consider whether you are maximising claims for capital allowances and capital works.

You can also obtain an immediate deduction for certain non-business prepaid expenditure, including interest on a loan relating to a rental property or to other passive investments such as shares. Consider prepaying some of next year's interest to accelerate the tax relief.

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Mark Chapman is director of tax communications at H&R Block, Australia's largest firm of tax accountants, and is a regular contributor to Money. Mark is the author of Life and Taxes: A Look at Life Through Tax.
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