When you are entering into an investment arrangement that will affect your tax liabilities, there are certain things you need to know.
Many people enter into some type of investment at some stage of their lives. This could involve shares, real estate, financial products or any other arrangement where there is an expectation of receiving a benefit either immediately or in the future. Regardless of the type of investment, often the result is a reduction in taxable income or an increase in the amount of claimable tax deductions. However, as appealing as the underlying investment might be, it’s important to carefully investigate the actual tax consequences before getting involved.
Not getting the right advice can lead to negative tax consequences and leave you with unforseen tax liabilities.
Of all the expenses you pay as an investor, taxes have the potential to take the biggest bite out of your total return.
The amount of tax you pay depends on a number of factors including the fund type (for example, super, unit trust, pension), type of assets, your marginal tax rate and the fund manager’s investment approach.
By maximising your use of tax-efficient investments, organising your assets in the right types of accounts and employing other tax-saving strategies, you can keep more of your investment returns.
This information is of a general nature only and does not take into account your personal situation. We advise that you seek advice from a professional adviser before making any decisions about a financial product.