The $1.6 million Transfer Balance Cap (TBC) on pension accounts affects only capital balances. It’s not affected by income earned and pensions paid, and there are ways to maximise the remaining tax-free status.
Author Archive | Graham Horrocks
Pensioners with assets that fall within the range of the Assets Test taper are subject to effective marginal tax rates in excess of 100%. In fact, retirees face many higher marginal rates than workers.
For a pension fund with a tax rate of zero, it is better to receive an after-tax dividend of $100 than a company retaining after-tax capital of $70. Why aren’t company directors asked about this tax inefficiency?
Every day, an expert writes somewhere about the adverse impact of a reduction in franking credits due to a lower company tax rate. This tax rate has no impact on the after-tax returns received by Australian shareholders.