Strategies for the legal minimisation of income tax in can be categorised in a number of ways:
- Actions which delay the recognition of income or accelerate tax deductions in the targeted tax year – i.e paying attention to the timing of transactions.
- Transactions which take advantage of tax concessions which have been deliberately written into the tax law, or where a lower-tax choice can be made
- (Much harder) Staying clear of technical traps which create unexpected tax liabilities, or which destroy the tax benefit of an otherwise effective tax strategy
In looking at actions which will reduce tax, the anti-avoidance rules must always be kept in mind. Of obvious concern are arrangements which are artificial or contrived, and which would appear to have little real rationale other than the creation of a tax benefit.
Less obviously of concern are transactions for which there is a reasonable explanation, but which also have (or are intended to have) a tax benefit.
In practice, identifying whether transactions pass the anti-avoidance rules is not always easy. Professional advice is an essential component of tax planning.
- Claims for clothing
- Reducing PAYG payments
- Transfer property to Super Fund – not tax avoidance
- Franking Credit Refunds Without A Tax Return
- The timing of long service leave
- What is salary sacrifice?
- Negative gearing
- End of year checklists
- Income thresholds for offsets, concessions and levies
- Rental property tax deductions
This page was last modified on 3 November 2015