Case Study: Reducing Tax Liability for High Net Worth Individual
A high net worth individual client was paying high tax rates. He approached Gotsis Accounting to consider his circumstances and advise him on to how to reduce his tax liability. The client was not very keen to acquire shares as he felt that he would have no control over his investment in this area. He wanted to start building up his assets but in such a way that he remained in control of his investments.
Tax Effective Recommendations
Following a detailed review of our client’s circumstances, his goals and aspirations, the client decided to buy a block of land on which he could build an investment property. His builder advised him that it may take two to three years for the property to become income-producing.
Real Tax Benefits
The interest, however, would be tax deductible to him from the time he took out the loan to buy the land, even though he did not receive any income from the property for some years. He was then able to reduce his tax liability, substantially, by deducting the loss on the property from his employment and other income.