As global investment markets continue to experience volatility, investors should be using the approaching end of financial year (EOFY) to take stock of their financial plan.

A formal review of existing tax strategies, savings goals and retirement objectives should be conducted before 30 June, so that any new legislation can be factored into a wealth plan.

Some wealth strategies to review and also consider for the new financial year include:

Tax-effective philanthropic giving

One option for managing tax is to consider tax-deductible charitable giving. This can assist with year-end tax planning while making a difference to the lives of others. Depending on your circumstances, you may consider donating directly to a chosen charity, setting up an account within a Public Charitable Fund, or establishing a Private Ancillary Fund (PAF).

Add to your super – and claim a tax deduction

Super, for most of us, is a concessionally taxed investment. This means that returns on your super investments are generally taxed at a rate that is less than your marginal tax rate.

Earnings are taxed at up to 15 per cent in accumulation phase or 0 per cent in retirement phase, which is a great means of boosting savings.

If you contribute after-tax income or savings into super, you may be eligible to claim a tax deduction. This means you’ll reduce your taxable income for this financial year – and potentially pay less tax.

Another way to invest more in your super is with some of your after-tax income or savings, by making a personal non-concessional contribution.

Although these contributions don’t reduce your taxable income, you can still benefit from the low tax rate on investment earnings. This tax rate may be lower than that which would apply if you held the money in other investments outside super.

Get a super top-up

If you earn less than $57,016 in the 2021/22 financial year, and at least ten per cent is from your job or a business, you may want to consider making an after-tax super contribution. If you do, the government may make a co-contribution of up to $500 into your super account.

Boost your spouse’s super and reduce your tax

If your spouse is not working or earns a low income, you may want to consider making an after-tax contribution into their super account. This strategy could potentially benefit you both; your spouse’s super account gets a boost, and you may qualify for a tax offset of up to $540.

People do need to meet certain eligibility conditions before benefitting from any of these strategies. Please discuss with your HLB contact and we can help you decide which strategies are appropriate for you.

This article was first published in the Winter 2022 issue of Financial Times.