This involves evening up the marginal tax rates between family members.  Tax is saved if income can be moved from the family member in the highest tax bracket to the the family member in the lowest tax bracket. 

The following should be taken into consideration:

1.  All investments earning income should be in the name of the lower-earning family member so they can take advantage of the lower tax rates (especially the $18,200 tax free threshold). This is the case for term deposits, shares, and property.

2.  Negatively geared, and loss making investments, should ideally be in the name of the family member with the highest taxable income.

3.  Where family members are all in the highest tax brackets, investments should be held in the name of an investment company (and taxed at 30%), or a self-managed super fund (and taxed at between 0-15%).

4.  If transferring income earning investments between family members the capital gains tax liabilities and stamp duty costs will need to be considered.

Before transferring assets you should consider:

1.  Calculate the tax savings with changing the ownership of investments between spouses.

2.  Calculate the CGT and stamp duty costs involved in transferring ownership of investments. Transfer the individual investments where tax savings exceeded the costs.

If you would like to discuss further please contact us:
 McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
 www.mcnamaraandcompany.com.au/contact-us
 Phone +61 3 9428 1062
 Email admin@mcnamaraandco.com

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