Value Collector
Have courage, and be kind.
- Joined
- 13 January 2014
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Have you seen the 2024 tax brackets, I think it’s one of the biggest reductions in tax I have ever seen, it’s the opposite of bracket creep.
Have you seen the 2024 tax brackets, I think it’s one of the biggest reductions in tax I have ever seen, it’s the opposite of bracket creep.no need to talk higher taxes this time , bracket creep and indexation ( on top of inflation ) should give it plenty , as long as the exports keep rolling , Albo picking a winning strategy , so almost nothing , and let that guy from marketing make all the gaffes
and even then the minor players picked up nearly 40% of the vote
Yep, I don’t argue that, it’s just that’s not what the article you posted was talking about, it was talking about the legitimate reasons some companies aren’t paying taxes.I feel/believe that many multi-national companies in Australia use "loop holes" to avoid paying any tax whatsoever despite earning substantial profits here - IKEA as an example has paid no tax despite surging sales/earnings during the pandemic.
Not at all, they are simply a way of owning assets and distributing income.
In the examples given, all profits are distributed to the owners, and tax is paid at that owners marginal rate, which can be as high as 47%, which is higher than they company rate of 30%.
The only difference is that capital gains are passed through and taxed at the personal tax rate which allows the owner to receive the 50% cgt discount, where as under the company structure they can’t get the discount, so it puts people that want to invest in large office towers on the same tax footing as someone investing in smaller property investments directly.
trusts never reduce the total dollars subject to tax, it only distributes those dollars to other taxpaying entities.
Firstly you are talking. About family trusts, which are totally different to the unit trusts and stapled trusts mentioned in the article, stapled trusts and unit trusts can only distribute profits to their owner/share holder, they have no discretion to distribute profits to lower tax payers.No they can reduce the total tax payable because they distribute income to those paying tax at a lower rate or not at all like children or other dependents.
'Total dollars subject to tax' is pretty irrelevant, the point is tax collected on income produced.
All that is happening by doing that is that the dividends are taxed at the tax rate of the stay at home Dad instead of the higher tax rate of the stay at home Mum, which makes sense because they are family assets, infact both the wage and the dividends are basically family assets, so it doesn’t make sense to load up just one family members tax return.
No they can reduce the total tax payable because they distribute income to those paying tax at a lower rate or not at all like children or other dependents.
'Total dollars subject to tax' is pretty irrelevant, the point is tax collected on income produced.
As I said, it's a tax avoidance scheme.
QED.
No it can be used as a tax minimisation strategy, but not tax avoidance. it’s simply a way of owning family assets, in a way that the profits can be distributed so that the family as a whole are not over paying tax.
I actually believe married couples should be able to do this without a trust.
I mean why should a married couple with one partner earning $200k pay more tax than a couple where both partners earn $100K each ($200k in Total).
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At the end of the day family trusts are simply a way to hold long term family capital, and yes the profits can be distributed to the members with the lower tax brackets, but this isn’t avoidance it’s minimisation, and really is just fixing some unfairness in the way the tax law works.
well picking a fight with China is a no-win for Australia , we ain't going to shift them with either strong words or force
HOWEVER if we sit down and talk/negotiate we might persuade them to move in a direction ( a little bit ) we would prefer
There are a few million active family trusts in Australia at the moment, so I think a lot more people are using them than you probably think.So why doesn't everyone use them ?
Make the benefits available to all and I wouldn't complain, but it just seems a dodge available to high income earners only.
"Trusts" are simply a tax avoidance scheme.
umm ... not quite. What actually happens is that the net (discounted) capital gains are passed from the trust to the individual. In the individual's tax return, the trust's capital gains are grossed up, so that the value of the discount is removed. Then, if the individual is entitled to the 50% CGT discount, then the discount is re-applied.The only difference is that capital gains are passed through and taxed at the personal tax rate which allows the owner to receive the 50% cgt discount,
Isn’t that basically the same end result?umm ... not quite. What actually happens is that the net (discounted) capital gains are passed from the trust to the individual. In the individual's tax return, the trust's capital gains are grossed up, so that the value of the discount is removed. Then, if the individual is entitled to the 50% CGT discount, then the discount is re-applied.
For the larger, listed, trusts (e.g. ETFs and property trusts), the individual is almost always entitled to the gain. However, in many smaller private trusts, this is not always the case.
Small difference, but it does make a difference.
KH
Keep in mind also, Family Trusts are also used for handling large multi-generational assets, that belong to a family as a whole such as a large family farming enterprise or large family business. (Trusts are actually an entity that predates Australia, it goes back to Middle Ages, and families set them up to control land etc that was to be used to benefit the family not just an individual)So why doesn't everyone use them ?
Make the benefits available to all and I wouldn't complain, but it just seems a dodge available to high income earners only.
Chinese Premier Li Keqiang had a warm welcome message for Anthony Albanese. Is this the start of a new friendship with China?
After close to two-and-a-half years of a Chinese cold shoulder, Beijing has moved quickly to show it's willing to patch things up with the newly elected Albanese government.
Premier Li Keqiang's congratulatory message would be routine under normal circumstances, but the warm language referencing the Whitlam Labor government's establishment of diplomatic ties with the People's Republic 50 years ago set the tone.
Mr Li said China was "ready to work with the Australian side to review the past, face the future, uphold principles of mutual respect, mutual benefit" — a far cry from the Cold War mentality language often hurled at the Morrison government.
While it's a sign China sees the change of government as a chance to reset relations, the expectations on both sides are of only a modest improvement in ties.
State media coverage of Anthony Albanese's win gives a better idea of what the Chinese leadership is thinking rather than officially saying.
While the Global Times, a Communist Party-owned outlet, is known for its attention-seeking nationalistic antics, it has played an outsized role in complimenting the Foreign Ministry's diplomacy in recent years.
It said Mr Albanese's government should be "a turning point" for relations and called on Australia to regain its "rationality" when dealing with China.
Indications are at the very least that Beijing expects less frank and forthright public criticism of its political repression in Hong Kong, Xinjiang and its increasing sabre-rattling over Taiwan.
As usual, state media put all blame on the Morrison government for the deteriorating ties and made nostalgic references to the "pleasant diplomacy" of the John Howard days.
There was no mention of the two Australians Beijing has locked in prisons on espionage charges, the billions of dollars of thinly disguised political trade bans it has put on Australian exports, or of President Xi Jinping — a leader very different from the less ambitious and repressive pair that John Howard dealt with in his terms.
It's for these reasons that Mr Albanese stated that relations with China would "remain difficult" before he jumped on a plane to attend the Quad meeting in Tokyo — a grouping Beijing objects to.
"It's China that's changed," Mr Albanese said, seeking to reassure the public that his government won't seek to return to the cosy days of Chinese government-linked donors lining the pockets of Australian political parties, whenever closer engagement was in vogue.
State media, too, is tempering expectations, noting Australia's military alliance with the United States means things can only get so much warmer.
Judging from the language out of China's government, Mr Xi increasingly sees the US as the ultimate adversary that can challenge China's dominance.
Unlike a decade ago, Beijing seems to now realise Australia isn't going to break its American ties.
But for the barley farmers, wine growers, lobster fishers and thousands of others affected by China's political trade bans, the hope will be that some improvement is better than none, and that exports will soon start moving through Chinese ports.
What we should make of the surprising message that China sent to Anthony Albanese
Messages of congratulations from foreign leaders are usually just a standard inclusion in the election win welcome pack, but the warm reception of Anthony Albanese by China's Li Keqiang signals a small but significant shift in our frostiest friendship, writes Bill Birtles.www.abc.net.au
No, it isn't, because even though the trust might be entitled to, and distribute, the capital gains discount to an individual, not all individuals might be eligible to claim that same discount.Isn’t that basically the same end result?
In that case it's the same as if the person had earned a capital gain in their own name isn't? eg if they earned a capital gain in their own name, but had a previous capital loss they would first deduct the gain from previous loss?No, it isn't, because even though the trust might be entitled to, and distribute, the capital gains discount to an individual, not all individuals might be eligible to claim that same discount.
Just one example: if an individual has brought forward capital losses, those capital losses must be applied to the grossed up capital gains from the trust, before any discount is applied to the remainder.
The only difference is that capital gains are passed through and taxed at the personal tax rate which allows the owner to receive the 50% cgt discount,
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