[Podcast] Avoiding the Tax Trap: An In-Depth Discussion with Assistant Tax Commissioner Rob Thompson

As we edge towards the end of the financial year, it's the time that you need to crunch some numbers to make sure you have all your tax obligations right, so today I am again joined by Rob Thompson, Assistant Commissioner of the ATO to dive into the world of taxation, specifically targeting tax time tips, the ins and outs of selling property, and the nuances of Capital Gains Tax.

Rob's here to ensure you can navigate these turbulent tax waters confidently and avoid running afoul of the tax man.

Whether you're looking to sell a property and want to understand the CGT implications, or you're prepping for tax time and seeking ways to optimise your claims, this discussion is tailored for you.

Tax time mastery for property investors with ATO expert insights

Today, Rob and I discuss the importance of understanding and maximizing tax deductions and capital gains tax intricacies.

Some of the key takeaways from our chat include:

• Importance of obtaining a clearance certificate for property sales over $750,000 to avoid withholding tax
  • If you don't have this certificate, a withholding rate of 12.5% on the sale price will be withheld by the purchaser and paid to the ATO
  • Why you should apply early for a clearance certificate if you’re thinking about selling
    • It takes 28 days to process
    • It’s free and valid for 12 months
    • You can apply online
    • You don't need to have signed contracts to apply
  • Why you need to consider whether you are an Australian resident for tax purposes
  • Capital gains tax implications for Australian residents, including discounts, exemptions, and the six-year rule
  • Strategies for claiming deductions on holiday home expenses and home office setups post-COVID
  • How careful record-keeping helps for accurate tax claims and avoiding double claims
  • The ATO's resources like the 'Are you A Resident' tool and CGT calculator for self-assessment

Our conversation today offers valuable guidance about being proactive about tax preparation that applies to both new and seasoned property investors looking to navigate the complex waters of real estate taxation.

Whether you're preparing for the end of the financial year or considering your next investment move, these expert insights are essential for achieving long-term financial success.

Links and Resources:

Michael Yardney

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ATO Resources:

• Tax time toolkit for investors: ato.gov.au/Investorstoolkit
• Rental properties guide: ato.gov.au/rentalsguide
• Rental video series: gov.au/Rentalvideos
• Property sale clearance certificates: gov.au/clearancecertificate
• Working from home: gov.au/home
• Car expenses: gov.au/car

Some of our favorite quotes from the show:

“Again, we can't give you personal advice, but my thought would be deprecation schedules give a cash flow benefit now and you can pay it off later if ever you sell the property.” – Michael Yardney

“There are a handful of mindsets that people adopt that take up a lot of their time and energy and stop them from achieving their dreams, stop them even chasing their dreams. It holds them back. It stops people from achieving wealth.” – Michael Yardney

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