Guys, I have been running some numbers on tax with respect to individual income, joint income, individual capital gains, and joint capital gains. To those of you with more knowledge on taxation can you advise if the following assumptions are correct. These points follow a story in an attempt to reduce my tax rate to 13% ... can this be done ? Please follow the through to the end. 1. If I were an individual earning a standard wage of $172,000 in one tax year with no capital gains (and no medicare tax for sake of argument) my after tax income would be $120,411. Marginal tax rate = $29.99%. 2. If my wife and I have no jobs and our only income is from dividends from joint share holdings (ignore franking credits for the moment) then a Gross Income of $154,000 would give us an after tax income of $120,701 . Marginal Rate (as a couple) = 21.62%. So spreading the 'families' income between the two of us means we only have to earn $154K to get $120K net of tax per year rather than having to earn $172K as an individual (forgetting about the medicare tax and the dividend franking credits) OK so far so good .... now can we go further and split the capital gains between my spouse and me (if we jointly own the asset sold) ? I believe that capital gains tax is totally separate from tax on income and although the tax bands are the same, ie. 6K, 37K, 80K etc. your tax rate for income is unrelated to your tax rate for capital gains so. So in the first two examples total tax is lower if we split the income gains between two. If one could manage ones dividend income (income gains) and manage ones capital gains in such away that both the dividend income is split between my spouse and me, and the capital gains are split between my spouse and me then theorhetically is the following possible ? If Partner 1 gross income = $34,500, tax = $4,275, net gain after tax = $30,225. If Partner 2 gross income = $34,500, tax = $4,275, net gain after tax = $30,225. If Partner 1 capital gain = $34,500, tax = $4,275, net gain after tax = $30,225. If Partner 2 capital gain = $34,500, tax = $4,275, net gain after tax = $30,225. Thus income/capital gain of $138,000 will give an after tax income of $120,901, which is a marginal tax rate of 12.99%. This example does not take in to account medicare tax, or dividend franking credits, or 50% discount for holding capital assets more than 1 year. Are these numbers correct ? Can this be done ? I am just planning ahead with regards having dividend generating assets and capital assets of various sizes/types/maturities and looking at how one might be able to manage ones tax and trying to keep all taxable gains in the lowest tax bands available, ie 0% below $6,000 and 15% between $6,000 - $37,000. Regards, Gunnerguy.