As we move into tax time, conversations with accountants are naturally ramping up. But this year feels different. Alongside the usual end-of-financial-year planning, investors are also trying to get clarity on a series of proposed government changes.
Some investors are making their own decisions without speaking to the accountants. We are already seeing everything from “I’ll wait and see”, through to “I’m going to restructure immediately”, particularly into companies. While it’s understandable that investors are trying to get ahead of potential impacts, there is a real risk in acting too early, especially when key details are still not finalised and implementation is still years away.
For investors, this creates a tricky environment. You want to be proactive, but not reactive. You want to understand your exposure, without locking in decisions that could trigger unnecessary tax or remove flexibility down the track.
The most productive approach right now is not to rush into structural changes, but to ask your advisers better, more targeted questions. Conversations with your accountant should be focused on understanding how the proposals apply specifically to your situation, rather than applying broad, one-size-fits-all strategies.
For many investors, the most important question will be “I still want to invest, so which structure should I be using going forward?” There won’t be a perfect answer given we have no legislated changes, but life goes on and people make the decisions based on the best information available at the time.
If you have concerns about what the changes may mean for you, here are some of the top questions investors should be asking their accountant right now:
- Which of my assets are exposed to the proposed CGT changes?
- With my current structures, will I get to keep the gain up to 1 July 2027 taxed at the 50% discount rate even if I sell after that date?
- Which of my assets should I get valuations as of 1 July 2027?
- Given the proposed changes, does a discretionary trust still make sense for me?
- How will the proposed minimum CGT rate and trust distribution rules interact with my deductions, superannuation and cash flow?
- What should I do now with my structures, given the changes are not yet law?
In a market full of noise and differing opinions, the right questions can cut through uncertainty and help you make decisions based on your actual circumstances, not assumptions.
