No stranger to this award, Shukri Barbara has been nominated as a top tax specialist by our readers year after year due to his strong track record and ability to put investors in the driver’s seat of their own fi nancial aff airs. He shares the most common tax missteps he sees investors make, along with tips for avoiding them.
WHAT READERS SAID
“Before I engaged Shukri’s services, I thought property and personal tax were a mysterious diffi culty of headaches and frustration. Shukri has proven to be one of the most helpful, well-informed and down-to-earth professionals I have dealt with. He and his team off er spot-on advice with a comprehensive range of tax and property services that are second to none. Shukri off ers simple explanations and solutions to what initially seem like complex problems, while having a genuine interest in helping his clients achieve their goals.” – Lucas Higham
“Before I engaged Shukri’s services, I thought property and personal tax were a mysterious diffi culty of headaches and frustration. Shukri has proven to be one of the most helpful, well-informed and down-to-earth professionals I have dealt with. He and his team off er spot-on advice with a comprehensive range of tax and property services that are second to none. Shukri off ers simple explanations and solutions to what initially seem like complex problems, while having a genuine interest in helping his clients achieve their goals.” – Lucas Higham
-Not only am I honoured but I am totally humbled by and grateful to all those who nominated me and the team at Property Tax Specialists in these awards. It is greatly rewarding to know we have delighted clients and subscribers. A sincere thank you as we continue to help you succeed and achieve your goals. Clients who keep coming back for support and advice every year are testimony that they are getting good advice. But when they go out of their way to nominate us for an award such as this, it also suggests that maybe the advice they are getting is good.
-Having a trusted property tax specialist on your team of advisors provides the comfort of knowing that the client is being looked after, even when investors are not noticing.
It is important to capitalise on the wisdom that a trusted advisor has accumulated over years of experience, education, learning, and the trusted support of a network of professionals.
-A trusted property advisor facilitates communication so the client can understand when provided with explanations, alternatives and analyses, which will assist in making clearer decisions. A trusted advisor with whom a longer-term relationship can be developed leverages the history of the investor by listening to and exploring ideas and options with the investor as they continue to grow in their experience and knowledge.
-Experience in life as much as technical matters helps greatly. Where the advisor has attended or is aware of the presentations of promoters, they are better equipped to understand what the client is trying to implement, and can help assist in articulating their needs and overall objective.
-Investors can be confident they are getting good tax advice in a number of ways. Their advisor should maintain tax agent registration. Membership of the two leading professional bodies, CPA Australia and the Tax Institute, requires us to undertake constant professional development, keeping abreast of changes in the law as much as developments in practice and administration of tax in Australia. Membership of the industry body PIPA further endorses their quality as they have to comply with the association’s ethical rules.
SHUKRI’S TOP TAX MISSTEPS EVERY INVESTOR SHOULD BE AWARE OF
-Asking advice after a contract is signed or calling up for advice one or two days before auction. Pre-purchase planning and structuring for the correct ownership is best done before a decision is made to purchase.
-Repaying loan principal. It’s better to use off set facilities to reduce interest expenses, while still making cash available for future investment.
-Interest deductibility. Using cash from your off set on your home loan for a deposit on a new investment property means you need to review your loan structure with property tax specialists and your broker, to ensure that deductibility of interest on the deposit component satisfies purpose tests.
-Making purchase decisions to ‘save tax’, instead of purchasing to grow value or cash flow. You should discuss your overall strategy and objective with your accountant/property tax specialist before investing in anything.
-Borrowing to extremes, without allowing for bad times or a potential loss of income, due to the birth of a child for example. You need to include a buffer in your planning and allow for contingencies, with enough to enable restructuring.
-Setting up ownership structures without rationale or reason. Try to understand why it is to be set up and how it works.
-Not understanding the implications of SMSF investing or the costs and trustee responsibilities, or not having proper documentation. Planning and discussion with your accountant/property tax specialist is imperative, as they can explain everything in layman’s terms.
-Increasing rental expenses, such as prepayments, when taxable income is likely to be below a threshold of $18,000. Planning and discussion with your accountant/property tax specialists throughout the year is essential to maximise your financial situation.
-Asking advice after a contract is signed or calling up for advice one or two days before auction. Pre-purchase planning and structuring for the correct ownership is best done before a decision is made to purchase.
-Repaying loan principal. It’s better to use off set facilities to reduce interest expenses, while still making cash available for future investment.
-Interest deductibility. Using cash from your off set on your home loan for a deposit on a new investment property means you need to review your loan structure with property tax specialists and your broker, to ensure that deductibility of interest on the deposit component satisfies purpose tests.
-Making purchase decisions to ‘save tax’, instead of purchasing to grow value or cash flow. You should discuss your overall strategy and objective with your accountant/property tax specialist before investing in anything.
-Borrowing to extremes, without allowing for bad times or a potential loss of income, due to the birth of a child for example. You need to include a buffer in your planning and allow for contingencies, with enough to enable restructuring.
-Setting up ownership structures without rationale or reason. Try to understand why it is to be set up and how it works.
-Not understanding the implications of SMSF investing or the costs and trustee responsibilities, or not having proper documentation. Planning and discussion with your accountant/property tax specialist is imperative, as they can explain everything in layman’s terms.
-Increasing rental expenses, such as prepayments, when taxable income is likely to be below a threshold of $18,000. Planning and discussion with your accountant/property tax specialists throughout the year is essential to maximise your financial situation.
