Securitor Financial Group Limited ABN 48 009 189 495 AFSL 240687 Australian Credit Licence 240687. This publication is current as at August 2013. This publication provides an overview or summary only and it shouldn’t be considered a comprehensive statement on any matter or relied upon as such. The information in this publication does not take into account your objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it and obtain financial advice. Any taxation position described in this publication is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice. The rules associated with the super and tax regimes are complex and subject to change and the opportunities and effects will differ depending on your personal circumstances. SECCB14178LC-0813lc

PREPAY INCOME PROTECTION PREMIUMS AND REDUCE THIS YEAR'S TAX

HOW DOES IT WORK?Protecting your income is important to maintain your quality of life, and provide support for your loved ones. If you are unable to work at your full capacity due to sickness or injury, Income Protection can provide a regular monthly benefit to cover mortgage payments and other expenses while you recover. Typically, Income Protection can replace up to 80% of your monthly income.

WHAT DOES IT MEAN FOR ME?If you have or are considering income protection insurance, you can prepay your premiums for up to 12 months. This may allow you to bring forward a tax deduction from the following year into the current year – potentially reducing your taxable income this financial year.

It’s important to remember that any benefits paid will be assessable at your marginal tax rate, whether you pay for the cover inside super or out.

You should seek advice before you decide to take out income protection insurance or alter an existing policy. Our financial Advisers can help you select a waiting period and benefit payment period that best suits your needs and circumstances.

STRATEGY IN ACTIONRobin is a 34-year-old non-smoker and earns a salary of $100,000 p.a. By taking out income protection insurance outside super, Robin will be able to replace up to 80% of his salary (i.e. $6,667 per month) if he is unable to work for more than one month due to illness or injury.

He should be able to claim the entire annual premium of $1,367 as a tax deduction in 2013/14 – resulting in a tax saving of approximately $526.

The table below shows the potential tax saving Robin could generate by prepaying his income protection premiums for the 2014/15 income year before 30 June 2014.

Before strategy

After strategy

Salary income $100,000 $100,000

Less insurance tax deduction N/A ($1,367)

Taxable income $100,000 $98,633

Tax payable $26,447 $25,921

Tax savings in 2013/14* $526

*Including Medicare levy

Do you have or are you considering income protection insurance?

Did you know that you could claim your income protection premiums as a tax deduction and pay less income tax?

Contact us for further information on 1300 761 669 or email to info@ofm.com.au

For more information, please contact your financial adviser