Secret tax trick of the mega wealthy

It’s a tax trick usually used by the ultra rich but this hack could benefit everyday Aussies to the tune of $34,000 or more.Trusts are a tax entity that gives you a lot of flexibility around your tax planning , and this is why they’re the mostEssentially how trusts work for investing is that you establish your trust, get it registered and get a tax file number , and once this is done you can invest money in the name of the trust.

If for example you set up a $2m investment portfolio in a trust that delivers you investment income in the next year of $100,000. You then need to decide which beneficiaries to distribute the money to.You can see that the difference between the highest and lowest tax rates is 47 per cent, which makes a huge difference to your investment return after tax.

Pretty much anyone can start a company, so long as you’re not on a government blacklist somewhere. You can do this all pretty easily online or with the help of a good accountant, and once you start a company you can apply for a TFN. Once you have this, you can open up bank accounts, investment accounts, and even buy property.

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