As the end of the financial year approaches, investors often scramble right before the end of June to maximise their tax refunds, only to find it’s too late to make a significant change to their financial positions.
Tax is often the biggest cost for investors – yet many aren’t aware of the strategies available to reduce it.
That’s why we’ve outlined key considerations to help your clients grow and protect their wealth through forward-thinking, tax-effective investment strategies designed for real financial outcomes.
Rethink tax to reposition wealth
With the new financial year comes the opportunity to reassess your clients’ tax strategy, not just for this year, but for the long term. Here are a few considerations for the new financial year:
Review taxable income and marginal tax impact
From 1 July 2026, tax cuts will ease cost-of-living pressures, putting more money back into Australians’ pockets. But by 2030, around 1 million people are expected to be on the top marginal tax rate.¹ For high-income clients, it’s not just about returns – it’s about how much they keep after tax. That’s why tax-efficient investment structures are essential.
The proposed Division 296 and clients’ maximising super contributions
The proposed Division 296 policy by the Labor government has increased attention on the broader issue of taxation policy in Australia, and a specific focus on alternatives for investors holding large savings amounts within the superannuation environment.
Therefore, attention is shifting toward alternative structures such as companies and family trusts. Investment bonds are a long-established, tax-effective solution for investors to not have to consider the impact of the proposed tax on unrealised and realised gains above the $3 million threshold.
Diversify without triggering capital gains
Rebalancing or adjusting a strategy through traditional investments like managed funds or shares can trigger capital gains and push high-income clients into a higher tax bracket. Structures like investment bonds can offer a CGT-free way to switch between investment options, helping reduce tax burdens.
Think beyond today and plan for the next generation
Revisiting intergenerational wealth strategies through a tax lens and planning how assets will be transferred when the time comes is not tomorrow’s problem. Many clients are unaware of the superannuation death benefit tax for non-dependants. Taxes can significantly erode wealth – that’s why it’s essential to explore investment vehicles such as investment bonds that offer simple, tax-effective, and predictable wealth transfers when reviewing your clients’ long-term strategies.
Focus on after-tax performance
Investment vehicles may often highlight headline investment returns, but these don’t reflect after-tax performance – the true consumable returns that investors keep.
Managing after-tax returns can be complex, as different investors – such as individuals, super funds, and companies - have different tax rates and tax rules. Additionally, investment strategies vary in their tax outcomes, which may not align with an investor’s tax situation in their own hands.
A tax-aware investment approach through a Generation Life investment bond can connect the dots, and through strategic implementation, can result in investors reducing their tax burdens and, in many cases, lowering advice costs. The reward for investors is higher after-tax returns without taking on additional investment risk – with tax savings compounding over time to help investors reach their financial goals sooner.
The rise of investment bonds
When it comes to navigating today’s complex tax landscape, investment bonds offer a flexible and forward-thinking solution. Here’s how investment bonds can help provide tax-optimised outcomes for your clients in the new financial year and beyond:
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Superior after-tax performance – Capped 30% tax rate on earnings but long-term effective rates can be estimated to be as low as 10–15% p.a. with Generation Life’s tax-optimised investment options.
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Complementary solution – A tax-effective solution that can be ideal for clients looking for a stable investment solution.
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Flexibility at its core – Switch between investment options without triggering capital gains tax, plus access to funds at any time, with no preservation rules or age restrictions.
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Unrivalled estate planning – Enables tax-free wealth transfers directly to beneficiaries regardless of who they are, no concerns of death benefit taxes and can bypass probate with appropriate structuring.
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Keeping it simple – No annual tax reporting when there are no withdrawals within the first 10 years, fewer compliance burdens, and a structure that adapts to evolving client goals – from wealth accumulation to intergenerational transfers.
Discover how investment bonds can complement your clients' portfolios to tax-effectively grow, protect and pass on wealth with confidence here.
