The design of superannuation is part of a social contract, and people who do not understand the long-term context are often offended that super funds should be tax-free in retirement. Don’t blame Peter Costello.
Tag Archives | franking credits
Almost 2,000 people completed the franking credits survey, with 84% opposing the Labor proposal. Surprisingly, over half intend taking some action to mitigate the consequences.
Amazingly, SMSF pensioners invested in Australian shares will be much worse off under the Labor franking policy than in the ‘bad old days’ when their pensions were taxed.
A reader provides a copy of a letter on franking credits received from Chris Bowen, and we want to give the Shadow Treasurer a chance to put his side of the story.
Many commentators are assuming all industry and retail funds can utilise their franking credit refunds, but a case-by-case check is required. Plus hard words from a cranky reader.
The Labor franking credit proposal creates a group of people who count franking credits as taxable income, and another group that doesn’t. A basic principle of tax should be horizontal equity between investment structures.
This week we have a short survey on your attitudes to Labor’s franking credits proposal. It should take less than two minutes to complete, unless you want to have a rant.
A reader has asked for the simplest possible explanation of dividend imputation and franking, as the heated debate features many people who do not understand the basics.
Investors whose income may be hit by Labor’s franking credits proposal can reallocate away from fully franked dividends to other investments to maintain their income, but it will involve different risks.
Labor’s proposal on franking credits is not only facing considerable opposition, but it is also encouraging people to consider future ways to utilise the credits. It is a chance to think deeper about estate planning.
Two studies dive into the numbers to argue that Labor’s franking policy will hit low income earners the hardest, because a franking credit is a constant 30% of the taxable income.
Tim Wilson MP, Chair of the House Standing Committee on Economics inquiry into refundable franking credits, has asked Cuffelinks readers to make submissions.
Labor’s franking proposal could affect many more super funds than expected, not only SMSFs, depending on the allocation to Australian shares, their franking and the percentage of assets in pension phase.
The 1 July 2017 changes have caused huge shifts in SMSF assets out of pension mode, and Labor’s proposed franking credit refunds policy is a further hit to self-funded retirees.