Personal Taxation Issues (2013 General Tax Strategies)

Subject to cash flow requirements, set term deposits to mature in the next financial year (i.e. after 1 July, rather than before 30 June).

Consider realising capital losses if you have already realised capital gains on other assets during 2012/13. Conversely, consider realising capital gains if you have unrecouped capital losses, or you expect substantially higher income in 2013/14 compared to 2012/13.

If you expect lower income in 2013-14 due to retirement or any other reason, consider deferring income until after 1 July, when you will be in a lower tax bracket. If you are a primary producer and you expect a permanent reduction in income, consider withdrawing from the income averaging system.

Where possible, arrange for substantial out-of-pocket medical expenses to be grouped in the same financial year, and for all expenses to be invoiced in the name of the higher income earner. This may enable you to meet the annual threshold for the Net Medical Expenses Tax Offset.

Arrange for deductible donations to be grouped in the higher income year, if you expect substantially higher or lower income in 2013-14 compared to 2012-13. Make all donations in the name of the higher income earner.

If you plan to purchase income-producing assets, consider acquiring assets that will generate positive cash flow in the name of the lower income earner. Conversely, consider acquiring negatively geared assets in the name of the higher income earner.

Don’t forget the the medicare levy has increased from 1.5% of income to 2% of income.