How to avoid paying a lot of tax?

[Walkabout]

Im new to futures trading and i am making a little bit of a profit. Was wondering if i should set it up as a business or not. Not sure how much tax im going to have to pay either way. If anyone has any ideas about whats best to do could you please be nice enough to let me know.. Thanks guys and girls...

 

[nomore4s]

Re: How to avoid paying alot of tax?

Im new to futures trading and i am making a little bit of a profit. Was wondering if i should set it up as a business or not. Not sure how much tax im going to have to pay either way. If anyone has any ideas about whats best to do could you please be nice enough to let me know.. Thanks guys and girls...

See your accountant, is the best advice I can give.

 

[pixel]

Re: How to avoid paying alot of tax?

See your accountant, is the best advice I can give.

+ 1

Apart from penalties for "hiding" your income and trying to cheat the taxman, an accountant will also know what you can deduct as education, equipment use, etc.

 

[Walkabout]

Re: How to avoid paying alot of tax?

+ 1

Apart from penalties for "hiding" your income and trying to cheat the taxman, an accountant will also know what you can deduct as education, equipment use, etc.

I didnt say anything about cheating the tax man... sheesh!!!
I will make an appointment with my accountant

 

[pixel]

Re: How to avoid paying alot of tax?

I didnt say anything about cheating the tax man... sheesh!!!
I will make an appointment with my accountant

sorry, pal;
the "tongue in cheek" went missing in transit. It was the combination of "avoid" and "tax" that tickled my funnybone. Definitely no offence intended.

 

[IFocus]

1st issue is to make a killing so you can pay some tax..................


Most retail traders claim losses during bear markets and beyond......

 

[Smurf1976]

First priority is to be making a lot of money. Handing over a % to the tax man is a secondary consideration to actually making money in the first place.

I don't know your personal circumstances or attitude obviously, but most of the people I've ever met or known of who are concerned with minimising tax didn't end up actually making much money anyway.

I'd rather the tax office took 40% of a $10 million profit than spend my days getting the tax rate down to 10% only to end up with my profit falling to $10,000 because I was too busy worrying about tax. Etc.

 

[tech/a]

1st issue is to make a killing so you can pay some tax..................


Most retail traders claim losses during bear markets and beyond......

You know I feel like Im a tax collector for the Government.
These are my taxes. (Besides Employee's PAYE).

GST
PAYROLL TAX
FRINGE BENEFITS TAX
PERSONAL TAX
COMPANY TAX
CAPITAL GAINS TAX.
PROVISIONAL TAX.

Im in the process of downsizing my company--it was never big 18 employees.
but you know what incentive is there for me to stick my neck out?

Sorry not a lot to do wit the posters question but perhaps your tax issues aren't a problem!

 

[So_Cynical]

Salary sacrifice into super is a round about way of saving and paying less tax.

 

[Wysiwyg]

Salary sacrifice into super is a round about way of saving and paying less tax.

Are we being duped with how super contributions are taxed immediately yet unit prices don't compound (simply change price) and can go backwards? 15% guaranteed for government but there is no contributors guaranteed return.

Amount taxed should be proportionate to return on investment?

 

[So_Cynical]

Are we being duped with how super contributions are taxed immediately yet unit prices don't compound (simply change price) and can go backwards? 15% guaranteed for government but there is no contributors guaranteed return.

Yep that's why ive got 70% of my super money in direct share investments that pay dividends into the account...yet the "unit" prices of those stocks still go up and down, but i do like to see that dividend money going into the account.

 

[explod]

Yep that's why ive got 70% of my super money in direct share investments that pay dividends into the account...yet the "unit" prices of those stocks still go up and down, but i do like to see that dividend money going into the account.

Yep, and trading in the super (post contributions) you only get slugged 16%

So bring on more multi baggers.

 

[skc]

If you are talking about trading income the only way to reduce paying tax is to move to a difference country... e.g. there is no capital gains tax in Hong Kong.

Setting up a company is a more efficient means to compound your capital, and slightly more advantageous in terms of expenses you can claim. At some stage though you will still need to pay tax when you take money out of the company and buy that house at Vaucluse.

Amount taxed should be proportionate to return on investment?

Amount taxed IS proportionate to return... inside or outside Super.

 

[Julia]

If you are talking about trading income the only way to reduce paying tax is to move to a difference country... e.g. there is no capital gains tax in Hong Kong.

Or in New Zealand.

 

[So_Cynical]

If you are talking about trading income the only way to reduce paying tax is to move to a difference country... e.g. there is no capital gains tax in Hong Kong.

Or in New Zealand.

According to wiki: Malaysia, Sri Lanka and Singapore also don't have a CGT. a world of opportunity awaits.

http://en.wikipedia.org/wiki/Capital_gains_tax

 

[McLovin]

NZ wouldn't consider profits from futures trading as being a capital gain and would tax them as ordinary income. I'm pretty sure HK would take a similar approach, although happy to be corrected.

If you want to go down the path of setting up an overseas investment company, then probably best to look at Singapore as Australia has a tax treaty with them and the company tax rate is 17%. There is no tax agreement with Hong Kong (AFAIK) so you would be taxed at source and again in Australia, unless you became resident of HKG, but if you're going to do that then you're better off setting up in a tax haven with 0% income tax.

These sort of things are expensive to set up and maintain and for most investors they aren't worth the hassle. It's an area where having access to a good private banker is worth its weight in gold (ie not what most of the retail banks offer, which is really more like "you have a big mortgage with us, so here's a priority telephone line to ring if you need a new atm card")

 

[Wysiwyg]

Yep that's why ive got 70% of my super money in direct share investments that pay dividends into the account...yet the "unit" prices of those stocks still go up and down, but i do like to see that dividend money going into the account.

I would think a dividend would be hard to overcome the net worth loss due to share price decline. You are content to sit on a capital loss and as I note, accumulate more at the lower share price which could effectively hold you under water for years and maybe even never recover. Interesting strategy.

Amount taxed IS proportionate to return... inside or outside Super.

Yes that is true but not what I was referring to.

 

[So_Cynical]

You are content to sit on a capital loss and as I note, accumulate more at the lower share price which could effectively hold you under water for years and maybe even never recover. Interesting strategy.

And the alternative dividend yielding strategy is?

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Interesting that on average i have 1 bad stock from every 9 selected....average from over the last 4 and a half years

 

[tminus]

Re: How to avoid paying alot of tax?

See your accountant, is the best advice I can give.

what's the best way to find a competent accountant?

 

[Lantern]

http://stopnwo.com/docs/Essential_Underground_Handbook,_2003_[PML_Publishing].pdf