Defining your tax strategy is an integral part of your financial planning process. Structuring the method in which you fund your investments using gearing can contribute to significant tax savings and can be a useful component of your wealth creation journey.
Meaning ‘borrow to invest’, gearing simply refers to the use of borrowed money to fund your investments, whether it be in shares, managed funds, property or other forms that you would otherwise not be able to make without the assistance of borrowed funds.
While the adoption of a negative gearing strategy is popular because of the potential tax advantages, it is paramount to be aware of the whole process and that a tax deduction can only be claimed when there is a loss made on investment. The negative gearing process can be an intricate one. When clients partner with Cleave accounting, they can be assured that they will receive sound investment advice entirely suited to their circumstances.
We encourage our clients to approach the option of negative gearing with their minds open to both the benefits and associated risks. Our advisers have the expertise and knowledge to ensure clients have absolute clarity. Cleave Accounting advisers break down the technical accounting vernacular into first principles so that clients have a full understanding of the status of their investments.