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 a Chartered Accountant, CPA and Chartered Tax Adviser and holds a Masters of Tax Law from the University of New South Wales. Previously, he was a tax adviser for over 20 years, specialising in individual and small business tax, in both the UK and Australia. As well as operating his own private practice, Mark spent seven years as a Senior Director with the Australian Taxation Office. He is the author of Life and Taxes: A Look at Life Through Tax.