Preparing for the end of year is an important stage as an investor. We wrote 3 tips last week.
Here are another 3 tips for end of year investment strategies to set up well for the end of financial year.
4. Bring-forward deductions
Bringing forward deductions is a great way to reduce your tax liability for the current financial year. Examples of this are investment subscriptions, pre-paying interest payments on investment loans or paying an annual premium payment for your Income Protection cover.
You could also consider disposing of investments that have experienced a capital loss and do not fit in your portfolio anymore. This loss can be used to offset any capital gains you have realised this financial year.
5. Defer taxable income
If possible, deferring income until after the 1st of July can be a useful strategy. This could involve delaying the sale of an asset or considering when fixed term investments will mature.
6. Property Investments
- Interest that is part private – best to have a separate loan for the investment.
- Conveyancing and purchase costs are not deductible, they are part of the cost base for capital gains tax purposes.
- Do minor repairs that can be immediately written off before they become major and possible capital repairs and need to be depreciated – eg we had a tap that come loose at the base, and a small water leak had developed under the sink. The water travelled to the downstairs study, and took weeks to show by a small stain in the roof plaster in the study. The tenant took weeks to tell us. We thought it was the shower in the ensuite directly above, but the plumber later found it was the powder room sink tap! Renovating the shower would costs several thousand – which was considered capital expense, fixing the tap and roof plaster was directly deductable.
- Rental property visit costs – are no-longer claimable from 1/7/17 tax years onwards.
- Delay large item purchasing, as they are generally depreciated, not immediately deductible – new oven, hot water systems etc.
What are your Thoughts? Comment below!