I have just sold out of my investment property. What can I do to reduce my capital gains tax ?
The fact that you have capital gains tax to pay means you’ve made a profitable investment, a good thing. And the tax on that profit is already pretty low. Nevertheless, it’s understandable that you might want to see what opportunities exist to reduce this liability further.Simon Letch The next port of call should be superannuation contributions. You have a maximum annual tax-deductible superannuation contribution limit of $27,500. Employer contributions are included within this limit. Let’s say your employer contributions total $15,000 for the year. That would mean you have $12,500 of headroom for you to make a one-off tax-deductible super contribution.
Making use of these unused prior year caps is the number one strategy for minimising capital gains tax. And as a handy side benefit, it increases your retirement savings, which will eventually become a tax-free income stream, so winning on all fronts.