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One thing that still amazes me to this day is how scared people are of the Australian Taxation Office. And I’m not just talking about everyday Australians. I’m talking about even accountants and lawyers who fear the ATO so much that their clients end up paying too much in taxes. It’s sad, reprehensible, and totally wrong.
I’m finding that part of my time is educating (or re-educating as is often the case) the accountants of my clients who have let hundreds of thousands of dollars slip through their hands and into the pockets of the Australian government.
Simple. Most people don’t understand that you can legally slash your tax bill without ever worrying about repercussions from those greedy parasites at the ATO. I know that my official job title says “Accountant” but I should actually become a sleep specialist. I find that once I show my clients how to stop paying too much tax, they sleep better at night knowing that there’s nobody who’s going to chase them up and demand payment or punishment.
There’s nothing that eases the fears of my clients faster than knowing that they saved hundreds of thousands of dollars and won’t get into trouble for it.
The problem is widespread but the solutions are not.
Everybody knows that they are paying too much in taxes. Every quarter, you get a nice reminder in the mail that your PAYG, BAS, and many other taxes have come due. And come June 30, the ATO goes into full battle mode, scaring the Australian public into paying more than they ought to pay. The pain is constant and persistent.
But too many people aren’t doing enough about it. They willingly donate money to the government. I don’t know about you, but if I heard of a business or charity that was casually throwing money away and getting no return for my buck, I wouldn’t shop there again. Would you?
“The best things in life are free, but sooner or later the government will find a way to tax them.”
And yet, that’s exactly what people are doing with the government. According to the latest statistics released by the ATO, less than 2% of the population are interested enough in their taxes to invest more than $1000 into finding a solution. Imagine if I could demonstrate to you how to invest $1000 and make tens of thousands of dollars in return, would you jump on it?
Of course! And yet I fear the reason most people don’t look too much into it (besides that unfounded fear of the ATO) is that there are too many “solutions” online offering ways to stop paying too much in taxes.
I see too many programs, offshore online forms, and snake oil salesmen all promising the same thing. They claim to deliver a solution that saves you tax money, but the ATO is on to the lot of them. Besides the questionable legality of a lot of those other guys, the ATO is already cottoning on to these types of programs, cracking down on the loopholes they claim to exploit.
The problems are mounting and the solutions (if you can call them that) are decreasing. What is Australia’s elite meant to do to stop paying too much tax?
According to a study by the Sydney Morning Herald, high-income earners all over Australia are finding ways to legally pay less tax and to keep more of their money. In the top echelon of high-income earners, the numbers are staggering.
In the top 50 earners claiming $0 tax (Yes, you read that right), they had an average earning of $2.36 million each.
The biggest deductions they claim are tax services, negatively-geared properties, and reported financial losses. And yet despite the so-called “monsters under the bed” at the ATO claiming that they would crack down on these high-income earners, the number of millionaires claiming $0 income tax grows each year.
So, the question remains.
What do they know that you don’t know?
A better question still. How can you use the example of these highly-successful schemes to find ways to legally stop paying too much tax?
One of the easiest and most successful ways I like to help my clients slash their taxes to almost nothing is to use companies and trusts. It’s a structure that helps you protect your assets and your wealth while legally avoiding the taxman’s empty threats and demands.
Imagine that you had a house full of valuable stuff and you wanted to safeguard it against thieves. What would you do?
You could do nothing and complain that these thieves robbed you blind, just like they did last year. Or you could invest in a structure designed to keep your stuff secure.
The parallel with your finances is almost the same. Instead of complaining that those thieves at the ATO took all your hard-earned cash, you can create structures with trusts and companies that house your wealth and keep it safe from the tax office when they come knocking.
Let me give you an example. Imagine that you have $100,000 and you diligently invest it every year for 20 years. If you invest at 20% per annum, you’ll come out the other end with $841,000, after taxes. That’s with everything done under your own name.
Not bad. It seems like a good return, but let me show you what a different tax structure will do for you.
We’ll use the same scenario with the same time frame and the same investing strategies. The only thing we’ll change is that you’ve wisely set up a tax structure to protect your investments using companies and trusts. After 20 years, your $100,000 has turned into $1.68 million dollars. That’s doubled your return using just the one concept of a structure.
What would you do with an extra $800K sitting in your pocket and not in the leaky coffers of the Australian government? A whole hell of a lot, that’s for sure.
Although the government would say different, the more money you make, the less tax you can pay.
Sounds too good to be true (or too illegal to be true), but I work with a number of high net-worth clients that know that to be an honest assessment of their wealth. Through correct structuring of your situation, maximizing your deductions, and offshore planning, I help my high-income clients legally pay almost nothing in tax.
One client of mine saved over $100,000 of profits that would have been taxed on his options trading business. Another client, a self-described “tax dummy”, was able to establish an offshore non-residency account for his agency and save thousands each year with our end-to-end service. Yet another client listed on the Financial Review Rich List was able to make some simple changes to his structures, set up a foundation overseas, properly start using the family trust he already had, and we were able to legally cut over $200,000 of taxes each year.
And best of all, I use 100% legal tax structures to protect more of your hard-earned wealth.
Stop fearing the taxman. Stop lying awake at night thinking about your dreaded tax bills. And start being proactive about how you protect your income and your assets from high taxes.
What are your options? If you’ve had enough, you can take up your bat and ball and leave. If the system is too harsh, by leaving Australia and becoming a non-resident, you can set up offshore structures and legally avoid paying any taxes. It’s easier than you think and you might already be travelling a bunch anyway. By spending less than 6 months out of the year in Australia, we can help you legally slash your tax bill to nothing. You can also set up offshore structures if you meet the strict criteria. Or we could just show you how to properly use the trusts and companies you already have to legally reduce your taxes. To get a free strategy session on the best option for you, meet with us today.