Just sold an IP and now looking to minimise tax

Discussion in 'Accounting & Tax' started by Gockie, 28th Oct, 2016.

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  1. D.T.

    D.T. Specialist Property Manager Business Member

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    Important lesson for newbies to have a read of Terry's tips before proceeding rather than trying to fix afterwards.
     
    D.T., 28th Oct, 2016
    #21
    balwoges likes this.
  2. Bran

    Bran Well-Known Member

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    That's the world's best problem to have.
     
    Bran, 28th Oct, 2016
    #22
  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    1. Prepay interest (careful for the side effect if its not repeated forever !!)
    2. Salary Sac with employer up to max of your cap if possible. Check your STATEMENTS to calculate the remaining cap - Dont assume employers pay on time.
    3. If 2 is not maxxed then consider IF you are eligible for a personal tax deductible super contribution. Many taxpayers who are employees are not eligible !! but a capital gain can change the calculations. Proposed law changes would allow a future deduction to all taxpayers but its not law now.
    4. Unpaid leave
    5. Bring forward deductions

    The start point must always be - What is the taxable value of the cap gain ?? Dont get your calcs wrong.
     
    Paul@PAS, 28th Oct, 2016
    #23
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  4. wylie

    wylie Moderator Staff Member

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    I have prepaid land tax before but you need to ask them to add a note so that it isn't bounced back to you.

    We have prepaid interest in a year we made a big gain and if you have multiple loans and have prepaid them all in a year you make a big gain, you can avoid the "all or nothing" situation in the folllowing year by prepaying one or two loans the subsequent year to "come down gradually" to not prepaying again.
     
    wylie, 28th Oct, 2016
    #24
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  5. wylie

    wylie Moderator Staff Member

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    Any large maintenance or improvements that need doing?
     
    wylie, 28th Oct, 2016
    #25
  6. The Y-man

    The Y-man Moderator Staff Member

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    Yeah, especially if you are planning this one!! :eek:

    6. Die in your investment property
    As you approach death move into your investment property with the biggest gain and rent out the main residence.

    The Y-man
     
    The Y-man, 28th Oct, 2016
    #26
  7. mcarthur

    mcarthur Well-Known Member

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    Buy a loss-making asset now :cool:. Kidman?
    Actually, buying something extremely negatively geared now, in a high-cost, quick-and-high-growth (ha!) area like Darling Point or Potts Point, and hold for 12 months, may be worth it if Sydney top-market was shining brightly. Melb perhaps? Of course you'd need the $5M to get in and realise the loss... :rolleyes:
     
    mcarthur, 28th Oct, 2016
    #27
  8. Gockie

    Gockie Life is good ☺️ Premium Member

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    I'll do this. Someone else said the same but you said it clearer :)
     
    Gockie, 28th Oct, 2016
    #28
  9. Marg4000

    Marg4000 Well-Known Member

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    Defer lodging your tax return until the last allowable moment.

    Do a rough calculation of the tax you will have to pay. From the sale, put that amount into the offset on your PPOR. It should sit there for around 18months and save you interest.
    Marg.
     
    Marg4000, 28th Oct, 2016
    #29
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  10. Gockie

    Gockie Life is good ☺️ Premium Member

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    Even this year I'm deferring lodging until the last minute.

    The plan is to put the money from the sale against the PPOR debt. Then spilt funds off for new IP deposits. That way the whole amount can be considered as borrowings. Believe this is ok.
     
    Gockie, 28th Oct, 2016
    #30
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  11. Steven Ryan

    Steven Ryan Well-Known Member

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    Good call.
     
    Steven Ryan, 28th Oct, 2016
    #31
  12. Eric Wu

    Eric Wu Well-Known Member

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    @Gockie, congratulations Linda. it is a nice problem to have, isn't it?
     
    Eric Wu, 28th Oct, 2016
    #32
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  13. twobobsworth

    twobobsworth Well-Known Member

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    Can you prepay expenses that haven't been billed? ie pay your council rates, or pay your strata fees a year in advance?
     
    twobobsworth, 30th Oct, 2016
    #33
  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    no
     
    Terry_w, 30th Oct, 2016
    #34
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