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.
Tag Archives | taxation
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?”
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.
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.
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.
A reader of Cuffelinks sent an email to the Shadow Treasurer complaining about the future loss of franking credit refunds. Here is Chris Bowen’s response and a firm stance on the policy.
Labor’s proposal to deny cash refunds of franking credits may become law next year. SMSFs will consider the various alternatives to minimise loss of franking credits, including the use of member-directed investments.
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.
The 50% CGT discount has little justification during low inflation and it encourages capital gains over income. The preferable system is the indexation in effect prior to 1999, and it will help housing affordability.
Given the proportion of people over 65 paying income tax has halved in the last 20 years, the structure of seniors tax may be next for reform. Should money be left inside or outside super for those who can access it?
Deciding whether managed funds or listed investment companies go better within super or out of it comes down to an investor’s own preferences and situation. This comparison will help explain the differences.
Few people understand how valuable the ‘anti-detriment’ benefit was, which means there is little focus on how the Budget will collect $350 million from you in only two years. Imagine if they announced new death duties.
Major reform of Australia’s tax laws hits a hurdle when opposition builds to unpopular policies. We have lost the ability to explain and advocate for change, especially when you look at global comparisons.
Some global index calculations understate the performance of the portfolio, making it easier for fund managers to outperform. Investors should know this and manage the consequences.
The current review of Australia’s tax system should also address the inequity of payroll tax, which for some businesses, discourages job growth and stifles the ability to compete on a level playing field.
A common concern for superannuants is how changes to the super system will affect their retirement outcomes. In reality, the proposed changes won’t affect the majority, but poor investment choices will.