Some of our readers have said family trusts have little merit because of the tight limits on the amount that can be distributed to children paying low tax rates. But the use of bucket companies drives many of the structures.
Make a note of the lodgement deadlines for personal tax returns, and start collecting the information you will need. Unless your affairs are simple, professional help is usually money well spent.
Let’s set this straight for the final time! Chris Bowen often used the example of a nurse on $67,000 who was at a significant disadvantage versus a retiree receiving franking. In fact, the outcome for both is almost the same.
The extra 15% Division 293 tax slips easily under the radar, and most people do not realise how it is calculated and how the proposed Labor policy might now capture them.
Labor’s franking credit proposal will reduce the income of many retirees who do not believe they are wealthy. Here’s an exchange with a reader who just wants an answer to “Is it fair?”
It sounds arcane but it could be costly. For the first time, about 44,000 individuals will receive their first Division 293 notice early in 2019, and it will surprise many.
In his latest memo to clients, Oaktree’s Howard Marks quotes the popular ‘beer’ example to explain the tax system, and we reproduce it here.
ETFs are popular investment vehicles but can be complex for tax returns. The ATO classifies them as trusts, and investors, administrators and accountants need to know the details.
Claims that zero tax rates on superannuation pension funds are a rort are misinformed because they ignore the taxes paid to put money into super, and the social contract that super was designed for.
Labor has foreshadowed significant amendments to a wide range of financial policies, and while the new PM has time to make up lost ground, Labor is favourite to win the next federal election.
Many people are reluctant to plan financially for their death, and it’s not simply a matter of passing money to heirs. Far more tax-effective techniques are available which can make inheritance simpler.
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.
Institutional investors have little interest in investing in residential property due to the low yields and favourable taxation concessions offered to owner occupiers and retail investors.
The added complexity of the new superannuation rules increases the compliance burden for investors and their advisers, and the requirements around the $1.6 million threshold are especially complex.