Tax Effective Investment

There are many different types of Tax Effective Investments. Agribusiness is one of them, and it is one of the largest sectors of the Australian and global economy. You may have heard how investing in this sector may possibly provide up-front tax benefits and high after-tax returns.

Citywest Accountants, as an authorised representative of Professional Investment Services, have reviewed a number of these investment products in detail, and can advise you on how to identify if they are suitable to your needs, and how these products can be used to your best advantage.

Why invest in agriculture?
Since 1788, agriculture has grown to become one of Australia's most prosperous industries. The most recent report from the Australian Bureau of Statistics (ABS) shows production for 2003-04 to have risen by 12%, to $36.6 billion annually.

The Australian Farm Institute recently estimated that the 'Farm Dependent Economy' (looking at the economic impact of farming beyond mere farm produce) contributes 12% of GDP, more than any other single sector in the Australian economy.

The study demonstrated that when agribusiness is undertaken at the top level, returns are comparable to the returns from ASX shares but with lower volatility in returns. This evidence suggests that the inclusion of agribusiness in a portfolio can impact positively on risks and returns of the portfolio as a whole.

Do you understand the tax implications of investing?
The key to building wealth is creating the right investment strategy. Consideration should be given to taxation and how you can achieve maximum returns on your investment. Preparing a financial plan and assessing your risk can be complicated. If you have any doubts you should seek professional financial advice. The following are also some of the most common types of  tax effective investments:

Superannuation
Superannuation is the most tax effective investment strategy as it is taxed at 15 per cent rather than your marginal tax rate.

Equity investments
Investing in shares has tax advantages not offered by other investment classes. Dividend imputation allows shareholders to receive credit for the tax that Australian companies have already paid.

Borrowing to invest
When you borrow funds for investment purposes you can obtain tax benefits. So long as that investment produces an income, most of the costs of owning it are tax-deductible, including any interest paid on the loan.

Some important considerations
The returns you make on investing are taxable. The income you receive is subject to income tax. If you sell an investment for more than you paid for it, you may be liable for capital gains tax. If you are a self-funded retiree you will need to be aware of the tax rules. As these rules are complicated and always changing, you might need professional advice about the tax implications of investing

For more information on Tax Effective Investment, or any of our financial services, you can ring us on (02) 9680-0131. Alternatively, you can book a FREE Consultation, by using our Online Enquiry Form.