Superannuation Discussion + market volatility

[cove]

Some might say that they are happy with 3 years in the election cycle rather than 4 years.

 

[andye]

What has gone by unnoticed, or perhaps I missed it, is that everyone in a pooled super fund (whether Industry or for profit) is taxed by the fund on unrealised profits every time the unit price is calculated. Even if your super balance is just a couple of thousand.
True the tax on unrealised profits is not sent to the tax man - I strongly suspect that less scrupulous funds pocket the interest earned on this amount.
It is done this way so people who are redeeming/moving to a different provider pay the tax due as if those assets were sold and the unrealised gains realised for tax purposes. Again interesting whether the fund or the entity earns the interest on these amounts.

It's something I've wondered as presumably in a big fund, when someone leaves the fund doesn't need to sell most of those assets as chances are someone else will be buying.
I understand that, when converting from accumulation to retirement, some funds give a modest uplift to recognise taxes on capital gains not needing to be paid

 

[andye]

On a related note, I presume it would be a sensible strategy in an SMSF to periodically sell and rebuy shares in retirement phase while under $3M to reset the CGT clock in case you tip over in the future

 

[Quickstatus]

reset the CGT clock

I think for that one we need to see the legislation

 

[Kerrodt]

On a related note, I presume it would be a sensible strategy in an SMSF to periodically sell and rebuy shares in retirement phase while under $3M to reset the CGT clock in case you tip over in the future

In its current legislative form, the $3m threshold and the tax that will apply beyond that has little to do with CGT. It is based on outright balance change from point to point (subject to adjustments for contributions and/or payments/withdrawals). I don't see how your proposal of selling and purchasing shares will avert this and reset any "clock" related to the excess balance taxes - unless I am missing something and you can enlighten me further.

 

[andye]

In its current legislative form, the $3m threshold and the tax that will apply beyond that has little to do with CGT. It is based on outright balance change from point to point (subject to adjustments for contributions and/or payments/withdrawals). I don't see how your proposal of selling and purchasing shares will avert this and reset any "clock" related to the excess balance taxes - unless I am missing something and you can enlighten me further.

Thanks. I hadn't understood how it was planned to work. It does seem simpler than tracking individual investments/assets

I had assumed that currently (in an SMSF) CGT was payable annually on a per asset basis if realised (but I could be wrong). So, how is the portion of capital growth prior to hitting the $3M mark going to be calculated and taxed after the 296 comes in? If CGT was payable on top of 296 then could effectively end up with 30-40% taxation on capital gains

Also, is it intended for there be a tax deduction if TSB fell over a year (once contributions/withdrawals are accounted for)?