Superannuation, the ultimate government cash cow?

[Belli]

This is going to be fascinating. Assuming the adjustment to the tax scales passes Parliament, it means those above $18.2k and below $45k pa will be subject to a tax rate of 16%.

Given the tax on superannuation guarantee contributions is 15%, there will only be a 1% saving (down from 4%) for this income band on SG contributions.

 

[qldfrog]

This is going to be fascinating. Assuming the adjustment to the tax scales passes Parliament, it means those above $18.2k and below $45k pa will be subject to a tax rate of 16%.

Given the tax on superannuation guarantee contributions is 15%, there will only be a 1% saving (down from 4%) for this income band on SG contributions.

So imagine how much better it is to not put in super if only for flexibility

 

[divs4ever]

So imagine how much better it is to not put in super if only for flexibility

but all that 'wonderful tax benefit , is lost in administration costs , misguided investments and other bolt-on siphons ( and consulting your accountant/adviser every legislation change )

and of course the government knows exactly where it is , so if you voted for ( say ) Bob Katter they could accidentally freeze your super withdrawals

 

[Ferret]

The December all groups CPI index announced yesterday was 136.1.

This is not enough to trigger indexation of the super transfer balance cap. For 2024/25 the cap will remain at $1.9M.

The concessional and non-concessional contributions caps are indexed by the average weekly ordinary time earnings. ABS is due to publish that on the 22 February. It is likely that these will increase to $30k and $120k respectively for 2024/25, to be confirmed on 22 February.

 

[dyna]

Not much wriggle room left until the " not ever ( ? ) to be indexed " $ 3 Mill. cap at 15% tax rate is staring you in the face .

Three mill. each .
Then where do you go ? Bury more and more capital in the sacred PPOR ? As if we need bigger mansions ( with just 2 nutjobs rattling around in them ) for this goddamned ,overtaxed , idiot-led country .

 

[dyna]

There you go !
Letter writer to Superannuation expert John Vasilev 's column in today's Weekend AFR Intends to do just that , come the July 1 , 2024 $3Mill . 15 % Tax Cap deadline.
Instead of copping it ( the new 30% tax rate on his excess ) this writer intends to sink his savings into an upgraded PPOR .
He can't be the only one working at finding a way around it , I'll bet !

Jimbo ! Old mate . See what the plebs do to your bright , big , spending agenda when you try to raise more revenue by screwing ever more tax out of productive capital ? It'll drift back into the last great effin tax shelter , they've got.

 

[mullokintyre]

There you go !
Letter writer to Superannuation expert John Vasilev 's column in today's Weekend AFR Intends to do just that , come the July 1 , 2024 $3Mill . 15 % Tax Cap deadline.
Instead of copping it ( the new 30% tax rate on his excess ) this writer intends to sink his savings into an upgraded PPOR .
He can't be the only one working at finding a way around it , I'll bet !

Jimbo ! Old mate . See what the plebs do to your bright , big , spending agenda when you try to raise more revenue by screwing ever more tax out of productive capital ? It'll drift back into the last great effin tax shelter , they've got.

Its ok Jimbo has a plan to tax the rich.
He will get someone from one of the many eft wing think tanks to get out their kites and fly the idea that Capital gains exemption on PPOR will be indexed on a sliding scale from 2.5 million till by the time you get to 7.5 million its 100% taxed.
The argument will be that the capital gains favours the rich, and the poor can't even get a house , much less have any capital gain when they sell their PPOR.
All the progessives will jump on the bandwagon, hte 50% who don't pay tax now will of course be in favour of it, and before you know its Labor policy.
And of course there is no garauntee there will be grandfather clause either.
Mick

 

[divs4ever]

Its ok Jimbo has a plan to tax the rich

the flaw in the plan is , those same wealthy folks have access to the smartest guys with a calculator ( and a financial background ) so watch that juicy money 'disappear ' , and that is by no means unique to Australia

but TV comedy is falling apart this might be truly entertaining( and educational )

 

[mullokintyre]

the flaw in the plan is , those same wealthy folks have access to the smartest guys with a calculator ( and a financial background ) so watch that juicy money 'disappear ' , and that is by no means unique to Australia

but TV comedy is falling apart this might be truly entertaining( and educational )

You cant make money just dissappear in a house sale.
The record is there for all to see. There are just too many participants.
The buyers. The sellers. the real estate agents. The banks. the mortgage brokers. The legal reps for both sides.
the property register. Ste state government revenue office. And pf course the ATO.
To get that sort of collusion is almost impossible.
The seller would need to have sort of offset for the CG, maybe some capital losses.
When its a reasonable amount of money, the ATO take a greater interest.
Mick

 

[divs4ever]

You cant make money just dissappear in a house sale.
The record is there for all to see. There are just too many participants.
The buyers. The sellers. the real estate agents. The banks. the mortgage brokers. The legal reps forvoth sides.
the property register. Ste state government revenue office. And pf course the ATO.
To get that sort of collusion is almost impossible.
The seller would need to have sort of offset for the CG, maybe some capital losses.
When its a reasonable amount of money, the ATO take a greater interest.
Mick

well the classic PPOR upgrade is a new pool ( and accessories ) ( i have no time for pools/saunas/spa baths , but others differ )

now depending on how socially active the taxpayer is , those parties can be a real money-maker ( Packer-Rivkin reference )

and of course those new walls need something to brighten them up .. a nice sculpture or painting will do that ( i have never paid more than $10 for a painting in my life , who knows maybe they are worth $50 by now )

some collusion is very possible you just need discrete partners to share the profits
remember these folks had $3 mill. ( in old dollars ) to stuff into the super fund .. they already have a flair for finance and profits

 

[farmerge]

well the classic PPOR upgrade is a new pool ( and accessories ) ( i have no time for pools/saunas/spa baths , but others differ )

now depending on how socially active the taxpayer is , those parties can be a real money-maker ( Packer-Rivkin reference )

and of course those new walls need something to brighten them up .. a nice sculpture or painting will do that ( i have never paid more than $10 for a painting in my life , who knows maybe they are worth $50 by now )

some collusion is very possible you just need discrete partners to share the profits
remember these folks had $3 mill. ( in old dollars ) to stuff into the super fund .. they already have a flair for finance and profits

@divs4ever Gotta have that there pool in the backyard.

 

[divs4ever]

no me , but others must have , whether it's a $100 plastic thing or a million dollar pool/patio/pergola complex

have heard mixed view on Real Estate agents on selling houses with pools , but if you can work those parties ..... well worth the cost of the free booze

 

[farmerge]

no me , but others must have , whether it's a $100 plastic thing or a million dollar pool/patio/pergola complex

have heard mixed view on Real Estate agents on selling houses with pools , but if you can work those parties ..... well worth the cost of the free booze

In our area where we sun bake a home pool of some sort is a necessity. A longggggggggggggg way to the river or beach

 

[divs4ever]

In our area where we sun bake a home pool of some sort is a necessity. A longggggggggggggg way to the river or beach

have pale skin and live well above sea level , but those cool breezes really have some velocity ( so watch out for falling branches )

but as an investment to avoid extra tax on the super ... throw in a nice 'guest-house/granny flat ' yes i could see Mr/Ms money-bags upgrading the PPOR for some mid/long term gains ( and maybe tax reduction )

would the ATO risk sending an official valuer to work out if there was rorting , if Mr/Ms money-bags was a clever customer

sure bling-laden high visibility folks , would be a fair target , but i knew several millionaires ( earn a mill. a year ) that barely looked middle-class , certainly not elitist or even rich , and we aren't even getting onto farmers when there can be millions in machinery sitting in the shed , or big bucks munching grass in the paddock ( depending which week you value the livestock )

so if you were clever enough to put $3 mill. in the super over the years , what chance you can slim that down profitably

 

[farmerge]

have pale skin and live well above sea level , but those cool breezes really have some velocity ( so watch out for falling branches )

but as an investment to avoid extra tax on the super ... throw in a nice 'guest-house/granny flat ' yes i could see Mr/Ms money-bags upgrading the PPOR for some mid/long term gains ( and maybe tax reduction )

would the ATO risk sending an official valuer to work out if there was rorting , if Mr/Ms money-bags was a clever customer

sure bling-laden high visibility folks , would be a fair target , but i knew several millionaires ( earn a mill. a year ) that barely looked middle-class , certainly not elitist or even rich , and we aren't even getting onto farmers when there can be millions in machinery sitting in the shed , or big bucks munching grass in the paddock ( depending which week you value the livestock )

so if you were clever enough to put $3 mill. in the super over the years , what chance you can slim that down profitably

Got the granny flat, well a 5 bed 2nd house on the farm vacant, plenty much machinery and grass mowers on the paddocks, value unknown week by week. Hopefully the price per kilo will jump up as the Eastern Staters have re discovered WA and our superb quality beef breeding machines here.

 

[divs4ever]

Got the granny flat, well a 5 bed 2nd house on the farm vacant, plenty much machinery and grass mowers on the paddocks, value unknown week by week. Hopefully the price per kilo will jump up as the Eastern Staters have re discovered WA and our superb quality beef breeding machines here.

LOL weighing each beast will be a challenge for ATO ( getting some of them into the crush is bad enough ) especially if the grazier is mildly unhelpful

just remember barter is king ( wink )

 

[Belli]

There you go !
Letter writer to Superannuation expert John Vasilev 's column in today's Weekend AFR Intends to do just that , come the July 1 , 2024 $3Mill . 15 % Tax Cap deadline.
Instead of copping it ( the new 30% tax rate on his excess ) this writer intends to sink his savings into an upgraded PPOR .
He can't be the only one working at finding a way around it , I'll bet !

Jimbo ! Old mate . See what the plebs do to your bright , big , spending agenda when you try to raise more revenue by screwing ever more tax out of productive capital ? It'll drift back into the last great effin tax shelter , they've got.

Hello, imputation of rent?

I hope it's been taken off the back burner and thrown out with the garbage.

 

[Value Collector]

Its ok Jimbo has a plan to tax the rich.
He will get someone from one of the many eft wing think tanks to get out their kites and fly the idea that Capital gains exemption on PPOR will be indexed on a sliding scale from 2.5 million till by the time you get to 7.5 million its 100% taxed.
The argument will be that the capital gains favours the rich, and the poor can't even get a house , much less have any capital gain when they sell their PPOR.
All the progessives will jump on the bandwagon, hte 50% who don't pay tax now will of course be in favour of it, and before you know its Labor policy.
And of course there is no garauntee there will be grandfather clause either.
Mick

Well an interesting Capital gains fact of History, in Canberra you can’t buy a house, you can only “buy” a 99 year lease.

The original idea was proposed because they thought private citizens earning capital gains on their properties as the cities around them grew was immoral. They believed that any growth in land value was due to the general population growing and the infrastructure put in by the government so capital gains should be returned to the government By way of lease expiring.

Luckily by the time the first 99 year leases started expiring recently the political mood has changed and they renew them for a few hundred dollars.

 

[divs4ever]

Hello, imputation of rent?

I hope it's been taken off the back burner and thrown out with the garbage.

that will only happen if it snares a large number of pollies and senior public servants

 

[Belli]

Well an interesting Capital gains fact of History, in Canberra you can’t buy a house, you can only “buy” a 99 year lease.

It's actually the land which is leased, not the house.

Crown leases

Find information on crown leases and leasehold requirements in the ACT.

www.planning.act.gov.au