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What you need to know about investment bonds

Posted on November 26, 2019 by admin

Investment bonds are a practical investment option for those who earn a high income and seek long term tax efficiencies.

Investment bonds, also known as tax-paid, insurance or growth bonds, work similarly to a managed fund, except they are combined with an insurance policy. There is a ten year rule which allows tax free earnings on the bond if no withdrawals are made in the first ten years and contributions do not exceed 125% of the previous year’s contribution. Most investment bonds offer a range of investment options to cater for differing risk levels such as cash, fixed interest, shares, property or a range of diversified investment options.

Investment bonds are particularly suitable for high income earners with a marginal tax rate higher than 30% who want to build wealth without increasing their personal tax liability. They are also useful for estate planning purposes as beneficiaries other than dependants can be nominated and will not incur tax upon receiving proceeds.

Investments held in an investment bond are generally not subject to capital gains tax (CGT). Where an investment does not qualify for a CGT discount, the maximum tax rate of 49% may apply on earnings whereas an investment bond generates a maximum rate of 30%.

However, investment bonds do carry some risk that individuals should consider before making a decision. Common fees such as establishment, contribution, withdrawal, management, switching and adviser service fees may be applicable depending on your provider and the investment options you choose.

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How to support your employees through COVID-19

Posted on May 18, 2020 by admin

Supporting your employees during chaotic times as an empathetic leader will improve your relationships within your business and boost personal confidence. Here are some ways you can support your employees mentally and financially during these uncertain times.

Be open with your employees
As businesses implode due to current economic circumstances, employees want transparency and closure over the state of the business and their employment. Thus, being open about your business’ finances and both your short-term and long-term growth initiatives when communicating with your employees will earn their trust and appreciation.

Being transparent over your employees’ job security is also a good idea, as unemployment is becoming a major concern for all Australians. Reassuring your employees and guaranteeing their safety will also boost productivity levels and business morale as a major source of anxiety is lifted off of their shoulders.

Take mental health seriously
You can support your employees’ mental health by encouraging a healthy work-life balance (especially if they are working from home) as well as offering tutorials, professional mentoring sessions and online webinars on mindfulness and effective stress management strategies. Be more lenient with your employees who are struggling with productivity due to mental fatigue and enforce healthy lifestyle habits.

Another way to protect your staff’s mental health is to give all your employees financial advice and education, even if they are not struggling financially at the moment. Let them know that you care for their livelihood and can support them with constructive guidance.

Take care of your staff’s physical health
Taking care of your employee’s physical health as well as their mental health will also relieve your employees’ stress levels and give them peace of mind when working with you. Allow your employees to work from home whenever possible and provide disinfectants like hand sanitiser and alcoholic wipes in your workspace to reinforce health precautions. Enforce social distancing procedures such as the 1.5m distance rule and strive to eliminate physical health risks related to your employees. It is vital that no employee comes to work if they are feeling sick.

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