Financial Planning News
Tax Alerts – Be aware of the risks
Recently the Australian Taxation Office issued the following alerts to help you recognise some of the ‘dodgy’ agreements that are out there. It is important that you are aware of these so that you do not get caught in the midst of something potentially illegal or at the very least frowned upon.
Is your Superannuation working for you?
If you have accumulated a significant superannuation balance, wish to maximise your returns and have greater control over your investments; a self managed super fund (SMSF) may be the answer.
A SMSF is a vehicle that is used to manage the superannuation portfolio of most commonly, an individual or family. A SMSF can have up to 4 members.
Beware of illegal schemes offering early access to super
There is currently a range of illegal schemes and plans that exist that are offering unsuspecting taxpayers access to their superannuation savings before retirement. The promoters of these plans will tell you that they are able to access your super savings for reasons such as paying off debt, buying a house or car or even going on a holiday. These schemes, as enticing as they may seem, are illegal and heavy penalties apply if you decide to participate in them.
Reduce your tax bill AND increase your wealth using imputation credits
Unlike income from cash or bonds, which is fully taxable at your marginal tax rate, Australian shares receive attractive tax concessions through the dividend imputation system.
Australia’s dividend imputation system can reduce and in some cases eliminate tax liabilities for domestic share investors. Given companies have already paid tax at the company tax rate, investors receive an offset in the form of imputation credits, these credits are equal to the amount of tax they pay on dividends. The higher the franking level the greater the benefit.
