Invariably the government takes a first bite at your income (and capital gains) through tax. As your income increases, the tax bite becomes bigger, in absolute terms as well as a percentage. When your income and wealth become significant, it is worthwhile to think have tax-planning.

Learn about tax through publications from the tax office, websites, and books. Make use of taxation advice as soon as you can afford but always ensure you get good value. Long-term costs are involved in many schemes so ensure your income is above the relevant threshold to make it worthwhile.

Specific tax advice is beyond the scope of this site – following are some high level principles.

* Take some income as benefits that are taxed at lower rates. Your corporate accountant could probably help, especially before you start a new job.

* Split your income. Put some income in your spouse’s name (and children) if you are self-employed. This takes advantage of individual tax thresholds. If possible, split your income across tax territories – this may be possible if you spend a lot of time overseas. When I was based in Hong Kong, 60% of my income was paid overseas, and this attracted no tax.

* Defer income and capital gains. Receive some income in the next fiscal year or later (but ensure you are still paid). Defer capital gains as they are not taxable until realized, and utilize capital losses to offset capital gains.
Special example: A friend’s family had owned their ancestral home for more than 30 years, and the value had increased 20 times. They faced a 5% capital gains tax which was a large mount in dollar terms. They deferred the sale. Soon after the government scrapped

* Make the most use of tax-deductible expenses. Example: You may be eligible for a home office, in which case, you can claim part of your house mortgage and operating expenses against your income. Other examples: depreciation, vehicle usage, meals, entertainment, salary to family and relatives.

* Maximize use of tax credits. These may be from your education, or dependent child and parent care. >/li>
* Corporatise yourself if you are running a business and your scale is sufficient. If not, set yourself up as a long-term consultant rather than as an employee. Use trusts and tax havens if your income is large enough.

Caveat: Tax should only be secondary to generating income. Some schemes for saving tax may actually cost you more in terms of lost income. Example: investments in vineyards have in, many cases, lost more money than the tax saved.