Suffering more than you............from what exactly?
Superannuation, the ultimate government cash cow?
- Thread starter drsmith
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From being younger then sp and having to bear the consequences for much longer i guess.but you will have the pleasure of being a winner
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Exactly frog, I've already retired and availed myself of what many are so willing to forego, I wish those enacting the change were so honourable.
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Remember, no cheap red for the rich bastards, we go for 10bucks a bottle mclaren vale shiraz.
While poor battlers buy coke and bourbon premixes
bigdog
Retired many years ago
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https://www.smh.com.au/money/super-...imit-through-inheritance-20190122-p50sva.html
What to do if your super is pushed over its limit through inheritance
By Noel Whittaker
January 23, 2019 — 12.03am
Question: My wife and I are self-funded retirees with both superannuation balances under the $1.6 million cap. If one of us passes away, the surviving partner will be pushed over that limit through the inheritance. Are there any provisions or conditions that accommodate this circumstance? For example, will the surviving partner be given permission to exceed the limit or allowed time to bring their super back under the $1.6 million?
Answer: The surviving partner will be able to rearrange their affairs so that $1.6 million ends up in pension mode, and the balance in accumulation mode, and a reasonable time will be allowed to do that. But bear in mind that money in accumulation mode pays tax on its income at a 15 per cent flat rate, whereas money held in a person’s own name has the benefit of an $18, 200 tax-free threshold. This is why the surviving partner should take advice about holding as much of the legacy in their personal name as is appropriate. A further benefit of doing this is that money held outside super is not liable for the death tax of 17% on the taxable component of superannuation left to a non-dependent.
Question: I am 67 and still work part time earning a gross income of $1,700 a fortnight. I salary sacrifice $700 a fortnight to meet the $20,000 allowed, plus $5,000 from my employer. Is it worth continuing to salary sacrifice? I have also two rental properties worth $1 million. Last financial year I got a tax bill for $5000. My superannuation balance is $670,000.
Answer: Your gross income is $44,200, so salary sacrificed contributions totalling $20,000 a year would still keep you over the tax-free threshold, where you start to pay a marginal rate of 19 per cent. The contributions tax is just 15 per cent, so you are slightly better off by salary sacrificing. It is also a form of compulsory saving, so keep it up.
Question: My wife and I are in our mid fifties and would like to retire by 60. We are looking for the best investment options to help achieve our goal but would like to avoid high-risk investments. Our combined annual income is $260,000 before tax. We have a total of $900,000 and are both salary sacrificing the maximum $25,000 per annum. We hold direct shares worth $90,000 and have $300,000 in savings. We have no debt and our home is worth $900,000. We have considered placing the cash into super to minimise tax but are concerned about changes to the rules that may push out the preservation age beyond our planned retirement age. Can you suggest any alternative tax-effective strategies to help us achieve our goal.
Answer: You may well have more than 40 years’ investing ahead of you, so you should be prepared to have a hefty percentage of your assets in growth assets. Take advice about low-cost Australian index funds – by definition the index can never go broke and historically it has never failed to reach a new high after a low. Also canvass quality actively managed funds for both the local and international markets.
Shares are highly tax effective, as a large proportion of the returns come from capital gains
You can minimise tax by holding as much is possible in superannuation, but also keep in mind that shares are highly tax effective, as a large proportion of the returns come from capital gains on which there is no tax until the asset is redeemed, which may be years after you retire when your income may be quite low. Returns from franked dividends are highly tax effective as you get a credit for the tax paid by the company.
I wouldn’t be overly concerned about rule changes in view of your age. Probably, your first action should be to talk to a good adviser to work out how much you will need when you retire, and then tailor your strategy around that.
Question: I have a question about the death tax on superannuation. I am single and have an adult daughter who is a single stay-at-home mum and a son who works. Neither are dependent on me. My instructions to my super fund are that my super is to be left equally to my two children. The taxable component is $180, 000. Am I right in my assumption that they will pay a 17 per cent death tax?
Answer: They will certainly pay the death tax but there is a solution. Make sure you have given an Enduring Power of Attorney to a trusted person and give them instructions to withdraw your entire superannuation balance and deposit the money in your bank account tax-free if your death appears imminent. This will get rid of any possibility of the death tax.
What to do if your super is pushed over its limit through inheritance
By Noel Whittaker
January 23, 2019 — 12.03am
Question: My wife and I are self-funded retirees with both superannuation balances under the $1.6 million cap. If one of us passes away, the surviving partner will be pushed over that limit through the inheritance. Are there any provisions or conditions that accommodate this circumstance? For example, will the surviving partner be given permission to exceed the limit or allowed time to bring their super back under the $1.6 million?
Answer: The surviving partner will be able to rearrange their affairs so that $1.6 million ends up in pension mode, and the balance in accumulation mode, and a reasonable time will be allowed to do that. But bear in mind that money in accumulation mode pays tax on its income at a 15 per cent flat rate, whereas money held in a person’s own name has the benefit of an $18, 200 tax-free threshold. This is why the surviving partner should take advice about holding as much of the legacy in their personal name as is appropriate. A further benefit of doing this is that money held outside super is not liable for the death tax of 17% on the taxable component of superannuation left to a non-dependent.
Question: I am 67 and still work part time earning a gross income of $1,700 a fortnight. I salary sacrifice $700 a fortnight to meet the $20,000 allowed, plus $5,000 from my employer. Is it worth continuing to salary sacrifice? I have also two rental properties worth $1 million. Last financial year I got a tax bill for $5000. My superannuation balance is $670,000.
Answer: Your gross income is $44,200, so salary sacrificed contributions totalling $20,000 a year would still keep you over the tax-free threshold, where you start to pay a marginal rate of 19 per cent. The contributions tax is just 15 per cent, so you are slightly better off by salary sacrificing. It is also a form of compulsory saving, so keep it up.
Question: My wife and I are in our mid fifties and would like to retire by 60. We are looking for the best investment options to help achieve our goal but would like to avoid high-risk investments. Our combined annual income is $260,000 before tax. We have a total of $900,000 and are both salary sacrificing the maximum $25,000 per annum. We hold direct shares worth $90,000 and have $300,000 in savings. We have no debt and our home is worth $900,000. We have considered placing the cash into super to minimise tax but are concerned about changes to the rules that may push out the preservation age beyond our planned retirement age. Can you suggest any alternative tax-effective strategies to help us achieve our goal.
Answer: You may well have more than 40 years’ investing ahead of you, so you should be prepared to have a hefty percentage of your assets in growth assets. Take advice about low-cost Australian index funds – by definition the index can never go broke and historically it has never failed to reach a new high after a low. Also canvass quality actively managed funds for both the local and international markets.
Shares are highly tax effective, as a large proportion of the returns come from capital gains
You can minimise tax by holding as much is possible in superannuation, but also keep in mind that shares are highly tax effective, as a large proportion of the returns come from capital gains on which there is no tax until the asset is redeemed, which may be years after you retire when your income may be quite low. Returns from franked dividends are highly tax effective as you get a credit for the tax paid by the company.
I wouldn’t be overly concerned about rule changes in view of your age. Probably, your first action should be to talk to a good adviser to work out how much you will need when you retire, and then tailor your strategy around that.
Question: I have a question about the death tax on superannuation. I am single and have an adult daughter who is a single stay-at-home mum and a son who works. Neither are dependent on me. My instructions to my super fund are that my super is to be left equally to my two children. The taxable component is $180, 000. Am I right in my assumption that they will pay a 17 per cent death tax?
Answer: They will certainly pay the death tax but there is a solution. Make sure you have given an Enduring Power of Attorney to a trusted person and give them instructions to withdraw your entire superannuation balance and deposit the money in your bank account tax-free if your death appears imminent. This will get rid of any possibility of the death tax.
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As the bigdog post says:
If Labor bring in the changes to franking credits, people really need to appreciate that the first $18,200 of EARNINGS outside of super are tax free, don't put all your eggs in one basket.
The only advantage of super for the retiree, will be that the earnings are tax free, but the first $18,000 of earnings outside of super is tax free and the Government can't tell you how to spend the capital.
Just do your sums and be very wary. IMO
Definitely get financial advice, before committing to super, just my opinion.
If Labor bring in the changes to franking credits, people really need to appreciate that the first $18,200 of EARNINGS outside of super are tax free, don't put all your eggs in one basket.
The only advantage of super for the retiree, will be that the earnings are tax free, but the first $18,000 of earnings outside of super is tax free and the Government can't tell you how to spend the capital.
Just do your sums and be very wary. IMO
Definitely get financial advice, before committing to super, just my opinion.
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Good point HelloU, it really makes super marginal, in a lot of cases. IMO
Also with a SMSF I think unrealised capital gains are included in income, they may not be outside super, advice would be a must.
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Here comes the push, from the union gravy train.lol
https://www.theage.com.au/politics/...mission-finding-on-super-20190210-p50wtx.html
https://www.theage.com.au/politics/...mission-finding-on-super-20190210-p50wtx.html
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Yes, and double that for a couple.
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Funny how the U.K system, is busy looking after people who paid into it.
https://thewest.com.au/business/you...ifetime-you-need-to-know-about-ng-b881097462z
While our politicians are busy trying to screw, the ones who paid their own pension here. LOL
There really is something wrong with us.
Apparently from what I've read, we had a system like the U.K, before the Government appropriated the money.
Now we have our own self funded system, they want to do it all again, but we cheer them on. Weird.
https://thewest.com.au/business/you...ifetime-you-need-to-know-about-ng-b881097462z
While our politicians are busy trying to screw, the ones who paid their own pension here. LOL
There really is something wrong with us.
Apparently from what I've read, we had a system like the U.K, before the Government appropriated the money.
Now we have our own self funded system, they want to do it all again, but we cheer them on. Weird.
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The company is paying (not government).
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It’s always at least risky to be forced to hand your money to someone with no real choice in the matter.
No matter how well or how badly the funds perform, you’re tied to them basically.
That being so, there’s no real incentive for them to make too much effort.
Pretty sure the government is refunding it and Labor are going to stop it
If a company was 100% owned by people doing this they would be paying zero on tax on profits
Great for the economy
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There not stopping it for all Australians though are they
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But the shareholders..you assume they are aussies would be taxed as per their income..
But no, not good for Bill and cie
So is labour paradise a place where all citizen are equal and dirt poor but we can still tax big companies.to pay for the ruling mob..
That explains where we are heading
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If we have to deal with an amendment, I prefer the idea of a cap on f/c so as to appease Billy's attack on the target market of top 3% or "Top end of town" whilst low to middle wealth recipients receive some benefit.
Low income earners would continue to supplement their incomes (avoiding government benefits) and retirees who are marginally outside the thresholds of the Age Pension (not considered wealthy) would continue to receive benefits to minimise the impact of entering the Age Pension and becoming a drain on the economy.
Low income earners would continue to supplement their incomes (avoiding government benefits) and retirees who are marginally outside the thresholds of the Age Pension (not considered wealthy) would continue to receive benefits to minimise the impact of entering the Age Pension and becoming a drain on the economy.
Why is it the governments in the first place?
The shareholders are part owners of the business and should be taxed according to their rate. It's not the governments in the first place.
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