The following case study relates to a real life example of how we helped
Alan and Stephanie achieve the following results in 4 years


In annual tax deductions


Increased SMSF investment portfolio value


Increase in net wealth

Our clients

Alan and Stephanie aged 40 and 39 years, came to Tax Effective four years ago to have their tax returns prepared. They are both professionals and earn a household income of approximately $460,000 per annum.

Whilst collecting their tax documentation they told us that they were moving to Adelaide permanently and wanted advice on buying a new main residence and wealth creation strategies.

Their initial thoughts were to sell their existing home and use the proceeds to purchase a new home in Adelaide. They would use the Adelaide property as security and purchase an investment property once they reduced their new home loan. However, they were unsure whether this was the wisest strategy.

Their existing Sydney home was valued at approximately $2,000,000 and had an outstanding home loan of $739,690. They also had a combined super balance of $280,567, and no other assets.

The problems before we got involved

  • Alan and Stephanie were paying a combined total of $162,594 in income taxes per annum, with no tax strategies in place to reduce their ongoing taxes
  • With extremely busy work and personal commitments, they had very little time to give their finances the attention it deserved
  • Their existing home loan was structured incorrectly and limited the amount of non-tax deductible debt that could be paid off their new home if they decided to keep and rent out their existing property. This mistake would cost them over $50,000 per year in tax deductions
  • By focusing their attention on paying down their home loan, they would be well into their 50s before they commenced the wealth accumulation process. Significantly limiting their potential to grow their family assets and achieve their financial and life goals

How Tax Effective helped Alan and Stephanie

  • We conducted a financial health diagnostic to gain a clear understanding of what they wanted their finances to do for them, now and in the future
  • With their priorities in mind we created a financial roadmap – a detailed wealth management plan designed to build financial assets that are aligned with their goals
  • We advised them not to sell their property immediately as it would provide them with a positive cash flow. It would also provide them with modest capital growth overtime and can be sold at a later date to pay down their entire debt on their new home in Adelaide
  • We established a tax-free, high interest savings account to transfer their surplus savings to enable Alan and Stephanie to pay more principal off their non-tax deductible new home loan when they purchased their home in Adelaide
  • We restructured their home loan and helped them purchase an investment property in the inner west of Sydney, and created a loan facility that would enable them to purchase their home in Adelaide when the time was right
  • We established a self-managed super fund with a limited recourse borrowing arrangement and helped them purchase a property in the Sydney’s Lower North Shore
  • We restructured their finances to ensure that they can continue to fund their investments and lifestyle in the event of unforeseen circumstances, such as a loss of employment, economic or sudden life changes

The result so far

Since becoming clients 4 years ago, Alan and Stephanie have achieved the following results

  • By following our strategies, we increased Alan and Stephanie’s tax deductions by $48,980 per annum, saving them $24,500 in tax every year
  • By keeping their Sydney residence as an investment property, it has grown by an additional $400,000 and pays them $18,000 in income after all expenses per annum
  • We successfully increased the net value of their super from $280,000 to $920,000 by purchasing a self-funding property in their super
  • Alan and Stephanie have realised an additional net increase in wealth of $912,000 as a result of our customised financial roadmap

Post becoming clients

We meet with Alan and Stephanie once a quarter to review their tax and financial affairs and continuously look for additional tax and investment opportunities they can capitalise on. We also continue to prepare and lodge
their tax returns.

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