A friend of mine is a new property investor, and is attempting to understand a lot of IP concepts. Once concept that caused grief was prepayment. My friend says that by prepaying in June 2015 then in June 2016 there will be less payments for FY16, and hence the prepayment "catches up". That is, prepayment in June 2015 might save $100 tax in FY15 but the taxpayer will have to pay $100 more tax in FY16. This is true to some extent, but I'd rather have that $100 now. Varying tax laws make it somewhat of an unknown 12 months away. For example, by 30 June 2016 the 2014 federal budget may be passed. Used carefully, I like prepayment, and I've done it on some years to bring assessable income into the next MTR. Can anyone think of reasoning that would persuade my friend that prepayment can be good? TIA.