Superannuation Discussion + market volatility

[andye]

Assets outside of super like real estate - there is no tax on unrealised CG.
Except for land tax - interestingly enough it is actually a tax on unrealised capital gains but it is certainly not 15%.

Yes but outside super, you'd still be up for marginal tax on dividend/rental income and 22.5% CGT when you sell.

I'm not sure 100% how CGT works currently inside super for property if you
(a) sell asset in retirement phase (?10% if held over a year or 0%)
(b) die and give to inheritors ( presumably15% if not spouse/minor children when it is 0% but is this any different for property that isnt immediately sold)
(c) die and retain property in an SMSF of which the inheritors are members

I personally don't like the idea of taxing unrealised gains but (unless there is a way of avoiding any tax or paying less tax in the future) isn''t it largely a cashflow issue as presumably if it later loses value, you'd get a deduction.

Can see how this would be particularly inconvenient with property (a) as investment is illiquid and likely leveraged and (b) often property is held onto through generations (so any CGT on realised gains can take a very long time to reach Treasury)

 

[Quickstatus]

Yes but outside super, you'd still be up for marginal tax on dividend/rental income and 22.5% CGT when you sell.

Remember that the TBC defines the amount that is tax free in pension phase. The rest is in accumulation is taxed at 15% +/- unrealised capital gains tax 15%.

you'd get a deduction.

The sting is (as I understand it) that Labor has said negative gain is not deductible.

It's too murky at the moment. But waiting for to to come up with the draft legislation is very risky

 

[andye]

Remember that the TBC defines the amount that is tax free in pension phase. The rest is in accumulation is taxed at 15% +/- unrealised capital gains tax 15%.

Definitely aware that you pay 15% on dividends etc in the accumulation accounts pre and post retirement.

A question I have is do you pay CGT if you sell an asset from accumulation once retired (I understand the rate is 10% for an asset held for over one year from an accumulation account pre-retirement).

Even if so, this is still conderably less than outside of super (though you would be able to only deduct 15% rather than marginal rate from property loan repayments along the way)

 

[andye]

...The sting is (as I understand it) that Labor has said negative gain is not deductible.

It's too murky at the moment. But waiting for to to come up with the draft legislation is very ririsky

That lacks logic and fairness.

....

I do have a feeling that there must be a big tax advantage (rather than merely opposition to the principle of taxing unrealised gains) in keeping things as they are, to explain the vociferousness of the opposition to the proposed changes.

 

[Quickstatus]

A question I have is do you pay CGT if you sell an asset from accumulation once retired

Don't know. But Twhatever it is they want it to be unrealised CG - which means you pay 15% every year

 

[andye]

Don't know. But Twhatever it is they want it to be unrealised CG - which means you pay 15% every year

I meant currently

 

[Quickstatus]

Don't know what the rules are for current CGT in super but whatever it is it is only taxed when realised - ie you have the funds to pay it.