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When it comes to investing, there are investment strategies you can utilise to minimise the amount of tax you pay.
Salary sacrifice contributions can help reduce the amount of tax you pay whilst building your retirement savings. The contribution to super is made before income tax is deducted from your wages. Whilst your money is in super, tax paid on fund earnings is usually much lower than other investment earnings outside of super.
Some investments are more tax effective than others. Growth investments such as shares and property often receive more favourable tax treatment. For example, capital gains tax and earnings tax on shares may be lower than the tax on fixed interest investments.
Borrowing money to invest (gearing) can also be a method of managing your tax obligations. If the cost of borrowing exceeds the income generated by the investment, you may be able to offset the loss against other taxable income.
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