Tax Education
Smart tax planning isn't about loopholes — it's about structuring your finances so you keep more of what you earn.
Structures
The structure you invest through can be just as important as what you invest in. Each has different tax implications.
The simplest structure. Investment income taxed at your marginal rate. CGT discount of 50% after holding 12+ months.
Best for: smaller portfolios, accessing CGT discountInvesting in your personal name is straightforward — no setup costs, no annual compliance fees. All income (dividends, interest, rent) is added to your taxable income and taxed at your marginal rate.
The key advantage is the 50% CGT discount on assets held for more than 12 months. For example, a $50,000 capital gain becomes $25,000 assessable. However, for high-income earners, even the discounted gain can attract significant tax.
Whether this structure suits you depends on your income level, investment size, and long-term plans.
Distribute income to lower-taxed family members. Provides flexibility in income allocation and strong asset protection.
Best for: families with income disparity, asset protectionA discretionary family trust allows the trustee to distribute income among beneficiaries each year. If one spouse earns significantly less, distributing investment income to them means it's taxed at their lower marginal rate.
Trusts also provide asset protection — assets in a trust are generally protected from personal creditors and bankruptcy. The 50% CGT discount is available for trusts (distributed to individuals).
Costs include trust deed setup (~$1,500–$3,000), annual tax return (~$1,000–$2,000), and trustee company maintenance if applicable.
Trust structures are complex. Professional advice is essential to ensure they're appropriate and compliant.
Flat 25% company tax rate for base rate entities. Retained earnings can be reinvested. Franking credits pass through on dividends.
Best for: business owners, income smoothingA company pays a flat 25% tax rate (for base rate entities with turnover under $50M and less than 80% passive income). This is significantly lower than the top marginal rate of 47%.
Profits can be retained in the company and reinvested, deferring personal tax until dividends are paid. When dividends are eventually paid, shareholders receive franking credits for the tax already paid by the company.
Note: Companies do NOT get the 50% CGT discount. This means capital gains are taxed at the full 25% company rate — which may be higher than the effective rate for individuals holding assets 12+ months at lower marginal rates.
Company structures involve ongoing compliance costs and complexity. Seek professional advice.
Contributions taxed at 15%. Investment earnings taxed at 15%. In pension phase, earnings tax drops to 0%.
Best for: long-term wealth building, retirementSuper is one of the most tax-effective investment structures in Australia. Concessional contributions (salary sacrifice, employer, personal deductible) are taxed at just 15% on entry — a significant saving for anyone on a marginal rate above 15%.
Investment earnings within super are taxed at a maximum of 15%, and capital gains on assets held 12+ months attract a 1/3 discount (effective rate of 10%).
In pension phase (typically from age 60), both earnings and withdrawals are completely tax-free, up to the transfer balance cap ($1.9M in 2024-25).
The trade-off: your money is locked away until you reach a condition of release (generally preservation age + retirement).
Superannuation rules are complex and change frequently. Always verify current caps and rules.
Same tax benefits as super, but you control the investments. Direct shares, property, alternative assets — all within the super environment.
Best for: $200K+ balances, hands-on investorsAn SMSF gives you full control over investment decisions while retaining all the tax benefits of superannuation (15% earnings tax, 0% in pension phase).
You can invest in direct shares, commercial/residential property (with restrictions), term deposits, ETFs, managed funds, and more. SMSFs can also borrow to purchase property via a Limited Recourse Borrowing Arrangement (LRBA).
Costs: Annual audit ($1,500–$3,000), accounting/tax return ($2,000–$4,000), ASIC fees, and your time as trustee. Generally only cost-effective for balances above $200,000–$300,000.
Responsibilities: As trustee, you are legally responsible for compliance with superannuation law. Penalties for breaches are severe.
SMSFs are not for everyone. Professional advice on setup, strategy, and compliance is essential.
| Structure | Tax Rate on Income | CGT Rate (12+ months) | Tax on $100K Income | You Keep |
|---|---|---|---|---|
| Personal (top rate) | 47% | 23.5% (50% discount) | $47,000 | $53,000 |
| Personal (37% bracket) | 37% | 18.5% (50% discount) | $37,000 | $63,000 |
| Family Trust (low-income beneficiary) | As low as 0–19% | 0–9.5% | As low as $0–$19,000 | Up to $100,000 |
| Company | 25% | 25% (no CGT discount) | $25,000 | $75,000* |
| Super (accumulation) | 15% | 10% (1/3 discount) | $15,000 | $85,000 |
| Super (pension phase) | 0% | 0% | $0 | $100,000 |
*Company: retained profits are taxed at 25%. Additional personal tax applies when dividends are paid (offset by franking credits). Rates shown are illustrative and simplified.
CGT
Understanding CGT can save you thousands. Timing, structure, and strategy all matter.
Hold an asset for more than 12 months and you only pay tax on 50% of the capital gain (for individuals and trusts).
Example: You buy shares for $50,000 and sell for $80,000 after 14 months. Your capital gain is $30,000. With the 50% discount, only $15,000 is added to your taxable income.
Strategically sell investments at a loss to offset capital gains, reducing your overall tax liability.
The ATO may deny a capital loss if you sell an asset and buy back the same or substantially similar asset for the purpose of generating a tax loss. This is known as a "wash sale." There's no specific time period defined — the ATO looks at the overall purpose and circumstances.
If you're a small business owner (turnover < $2M or net assets < $6M), four powerful concessions may apply:
If you've owned the asset for 15+ years and you're 55+ or permanently incapacitated, the entire capital gain is exempt.
Reduce the capital gain by 50% — this is in addition to the standard 50% CGT discount (potentially 75% total reduction).
Exempt up to $500,000 (lifetime cap) of capital gains. Under 55? The exempt amount must go into super.
Defer the capital gain by acquiring a replacement active asset or improving an existing one within 2 years.
Eligibility for small business CGT concessions is complex and depends on multiple factors. Professional advice is essential.
This is an estimate only. Actual CGT may differ based on other income, losses, concessions, and individual circumstances.
Super
Super is one of Australia's most powerful wealth-building tools — if you know how to use it.
By sacrificing $10,000 of pre-tax salary into super, you pay 15% contributions tax instead of your marginal rate.
*Includes 2% Medicare levy. Actual tax saving depends on your marginal rate.
$30,000 annual cap (2024-25). Includes employer SG (12%), salary sacrifice, and personal deductible contributions. All taxed at 15% on entry.
Concessional (before-tax) contributions include everything your employer puts in, salary sacrifice amounts, and personal contributions you claim a tax deduction for.
If your employer contributes 12% of $100K ($12,000), you have $18,000 of cap remaining that you can fill via salary sacrifice or personal deductible contributions.
Exceeding the cap: Excess concessional contributions are added to your assessable income and taxed at your marginal rate (with an offset for the 15% already paid).
Caps and rates are subject to change. Verify current thresholds with your adviser.
If your income + super contributions exceed $250,000, an extra 15% tax applies to the contributions — bringing the total contributions tax to 30%.
Division 293 is designed to reduce the tax concession for high-income earners. The additional 15% tax applies to the lesser of: your concessional contributions, or the amount by which your income + contributions exceed $250,000.
You'll receive an assessment from the ATO. You can pay it from your bank account or elect to have it paid from your super fund.
Even at 30%, super contributions tax is still lower than the top marginal rate of 47%.
Didn't use your full $30K cap? If your total super balance is under $500K, you can carry forward unused cap amounts from the previous 5 years.
This is a powerful strategy for people who've had years where they didn't maximise contributions — perhaps due to maternity leave, career breaks, or just not knowing about it.
Example: If you only contributed $20K in each of the last 3 years (cap was $27.5K or $30K), you may have accumulated $30K+ in unused cap space that you can use in one hit.
This is especially useful after receiving a bonus, inheritance, or property sale proceeds.
Available from 1 July 2018 onwards. Unused amounts expire after 5 years.
After-tax contributions up to $120,000 per year (or $360,000 using the 3-year bring-forward rule). No tax on entry.
Non-concessional contributions (NCCs) are made from after-tax money — so there's no tax on entry. However, once inside super, the earnings on these contributions are taxed at only 15% (or 0% in pension phase).
Bring-forward rule: If you're under 75, you can contribute up to 3 years' worth ($360,000) in a single year. This is useful for large lump sums (e.g., inheritance, property sale).
Total super balance limit: The bring-forward rule is not available if your total super balance is $1.9M or more. The NCC cap is reduced or nil depending on your balance.
Exceeding the NCC cap results in excess tax of 47%. Get professional advice before making large contributions.
Access your super as an income stream while still working. Can be used to reduce tax or boost super contributions.
Once you reach preservation age (currently 60), you can start a Transition to Retirement pension. This lets you draw between 4% and 10% of your balance each year as income — while continuing to work.
Strategy: Salary sacrifice more into super (taxed at 15%), then top up your take-home pay from the TTR pension (tax-free from age 60). The net effect: more money into super at a lower tax rate.
Note: Since 1 July 2017, earnings on assets supporting a TTR pension are taxed at 15% (same as accumulation), not 0%. The main benefit is now the income tax advantage, not the earnings tax advantage.
TTR strategies require careful modelling to ensure they provide a net benefit. Speak with an adviser.
Convert your super into a tax-free retirement income stream. The ultimate destination for your super savings.
Once you've permanently retired (or reached age 65), you can convert your super into an Account Based Pension. This is where the real tax magic happens:
Tax-free earnings: Investment earnings on assets supporting your ABP are taxed at 0% (up to the Transfer Balance Cap of $2M per member). Compare that to 15% in accumulation or up to 47% outside super.
Tax-free income: Pension payments from age 60 are completely tax-free. No tax on the way in (from super), no tax on earnings, no tax on the way out.
Minimum drawdowns: You must draw a minimum percentage each year (4% for under-65s, increasing with age), but there's no maximum — giving you full flexibility.
Strategy: Maximise super during your working years (at 15% contributions tax), then convert to ABP at retirement (0% earnings tax, 0% income tax). The difference between 47% marginal tax and 0% over decades is transformational.
Transfer Balance Cap: Each member can transfer up to $2M into pension phase. Amounts above this remain in accumulation (15% earnings tax). For couples, that's up to $4M in tax-free pension phase.
The transition from accumulation to pension phase involves important decisions about timing, structuring, and reversionary nominations. Professional advice ensures you maximise the tax benefits and meet all compliance requirements.
Advanced Strategy
Convert non-deductible mortgage debt into tax-deductible investment debt — legally and strategically.
Debt recycling is a strategy where you use available equity in your home to invest, making the interest on that portion of your loan tax-deductible. Over time, you replace "bad" non-deductible debt with "good" deductible debt.
Access equity from your home loan via redraw or a separate loan split
Use the funds to invest in income-producing assets (shares, ETFs, etc.)
The interest on the investment loan is now tax-deductible
Use dividends and tax refunds to pay down the home loan, then reborrow and invest again
💡 "Want to model it? Our advisers use sophisticated debt recycling calculators to show you exactly how the numbers work for your situation."
Dividends
Australia's dividend imputation system means you may get a tax credit — or even a refund — on dividends from Australian companies.
You declare $100 as income but get a $30 tax credit. If your marginal rate is below 30%, you get a refund of the difference.
International shares don't carry franking credits. A $70 dividend from overseas is simply $70 of assessable income — you don't get credit for any foreign company tax paid (though foreign income tax offsets may apply in some cases).
For investors on lower marginal rates, fully franked Australian dividends can produce a higher after-tax return than equivalent international dividends — plus potential franking credit refunds.
Not all dividends are 100% franked. Some companies pay partially franked (e.g., 50% franked) or unfranked dividends — usually because they earn some income overseas where Australian company tax wasn't paid.
With a 50% franked dividend, you receive half the franking credit you would for a fully franked dividend. The unfranked portion has no credit attached.
💡 "Our franking credit calculator tracks your entire portfolio — so you know exactly what tax credits you're accumulating year-round."
Business
Running a business gives you more levers to pull — but also more complexity to manage.
The right balance between salary and dividends depends on your personal tax rate, the company tax rate, super obligations, and cash flow needs. Getting this wrong can cost thousands.
Base rate entities (turnover < $50M) pay 25% company tax. Understanding passive income rules, franking account management, and retained earnings strategies is key.
If your income is primarily from your personal skills/effort (PSI), special rules limit your ability to split income or claim certain deductions through a company or trust.
Planning to sell? The small business CGT concessions can save hundreds of thousands. But they require advance planning — not a last-minute scramble.
Individuals with income from an unincorporated small business (sole trader, partnership, trust) may be eligible for a tax offset of up to $1,000. It's modest but it adds up.
Business tax strategies are highly individual. The right approach depends on your business structure, revenue mix, personal situation, and long-term goals.
Our Approach
We work hand-in-hand with your accountant. We bring the investment and strategy expertise; they handle compliance and lodgement. Together, the outcome is better.
Every investment decision considers the tax impact — from franking credit optimisation to CGT harvesting to structure selection. Tax is never an afterthought.
Great tax strategy happens all year. We're reviewing, adjusting, and optimising continuously — not scrambling in the last week of the financial year.
We've built deep relationships with some of Sydney's best accountants. If you don't have one, we'll connect you. If you do, we'll work seamlessly with them.
"Tax planning is at the heart of everything we do — it's why accountants refer their best clients to us."
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