This is all bullshit. Companies can choose whether to frank their dividends. If I was a betting man I would bet there would be very few companies franking their dividends after the election.
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None of the following should be taken as financial advice.Can someone (Al) answer this for me
A self-funded retiree couple with a $3.2 million super balance, plus their own home draw $130,000 a year in superannuation income.
They own $200,000 in Australian shares held outside super and take a further $15,000 a year in dividend income.
As the income from super is tax free they report a combined taxable income of just $15,000.
Under the current system this couple can claim excess franking credits as a cash refund on the shares they own. (30% of $15k?)
Under the proposed system they pay no tax and receive no refund.
Correct?
I thought Labor's plan was to take franking credits off people in retirement phase, who are receiving income from their pension (super accumulation in retirement phase type pension), on which they they don't pay tax?Sorry, but its clear you do not understand the issue. Again, not a go at you, but lack of understanding is the crux of this issue.
Franking Credits are tax PAID by the company (for simplification) at 30%.. That tax Paid, is then offset against your Personal income tax Liability.
Because a rich person has a tax rate above 30%, they Fully use the franking credits.
But a poor person who has less income Loses the benefit because they cannot offset the Credit provided.
Labor wishes to take this Credit off the poorer people of our society. That is the issue here.
Technically Oddjob is right, in saying companies are able choose whether to frank dividends. Franking Credits are created by pooling the income tax paid by the company. Those credits can be applied to a dividend at the companies' choosing. Those credits can be passed to shareholders at a rate up to maximum 30%, but can be lower. Yes, a franking credit could be passed on at a rate of 15%, or 1%. I'll explain some more of this later., there is a number of corporate factors at play here.This is all bullshit. Companies can choose whether to frank their dividends. If I was a betting man I would bet there would be very few companies franking their dividends after the election.
This is what Labor is planning on. People deciding on the issue without knowing what they are talking about.I thought Labor's plan was to take franking credits off people in retirement phase, who are receiving income from their pension (super accumulation in retirement phase type pension), on which they they don't pay tax?
Didn't think Labor were planning on taking franking credits away from people who are earning money and paying income tax on it?
There are several glaring errors in fact here. Along with not understanding what Superannuation actually is, or what a super fund can invest in. Then you are making assumptions, guesses and showing you don't even know what Labor's proposed policy on franking credits is.None of the following should be taken as financial advice.
Fuck, it's been a couple of years since I worked in this. Super used to have 3 stages
Simplified again, only investments of a certain type and maintained/reported on in a certain way, can be classified as super. These investments are quarantined (preserved) until retirement, or transition to retirement. Investments in Super under a contribution cap do not get income tax charged on them, but are charged a discounted tax rate, 15%, known as contributions tax. Some types of share investments can qualify as super and income on these (dividends) I believe are also charged a 15% contributions tax.
- contributing,
- transitioning to retirement (contributing to super and receiving income from your pension)
- receiving income from your pension (simplified - pension is what your super becomes when you retire)
When super moves into the pension phase it is generally paid out in small amounts and if you have enough these payments are meant to last you a lifetime. These pension/income payments have no tax charged on them if the individuals pension abides by the rules. My understanding is that franking credit rules apply to shares that were held as part of the individuals super when they were in the accumulation phase (in an SMSF). When these shares are moved into the pension/income payments phase I'm guessing they pay no income tax on the divided payments from the SMSF shares.
I reckon the tax treatment of the income on shares held outside the super/pension would depend on the creativity of their accountant. As these shares are outside super/pension I don't think Labors changes would apply to them.
Sure this has been covered already.
From ALP policy.This is what Labor is planning on. People deciding on the issue without knowing what they are talking about.
You are wrong. Please read the policy before replying again.
There are several glaring errors in fact here. Along with not understanding what Superannuation actually is, or what a super fund can invest in. Then you are making assumptions, guesses and showing you don't even know what Labor's proposed policy on franking credits is.
You're correct in one point, none of this should be taken as financial advice...….
I'll see if I get time tomorrow to correct the errors in here.
Interesting comment on Insiders on the weekend about polling. We have compulsory voting and a single polling day unless you have a reason to get a prepoll or postal vote. Yes these are not hard to do especially if you are generous with the facts. Why not have the prepolls open a week before for anyone without making up some shit like I am going spelunking or I am getting into some heavy BDSM and will have my balls whipped for the full duration of polling? Would reduce the numbers and congestion on the Saturday and minimise postal votes. Just a few locations. I like it, any thoughts?
Interesting comment on Insiders on the weekend about polling. We have compulsory voting and a single polling day unless you have a reason to get a prepoll or postal vote. Yes these are not hard to do especially if you are generous with the facts. Why not have the prepolls open a week before for anyone without making up some shit like I am going spelunking or I am getting into some heavy BDSM and will have my balls whipped for the full duration of polling? Would reduce the numbers and congestion on the Saturday and minimise postal votes. Just a few locations. I like it, any thoughts?
Interesting comment on Insiders on the weekend about polling. We have compulsory voting and a single polling day unless you have a reason to get a prepoll or postal vote. Yes these are not hard to do especially if you are generous with the facts. Why not have the prepolls open a week before for anyone without making up some shit like I am going spelunking or I am getting into some heavy BDSM and will have my balls whipped for the full duration of polling? Would reduce the numbers and congestion on the Saturday and minimise postal votes. Just a few locations. I like it, any thoughts?
This is a lie. It affects anyone receiving a dividend who is not paying 30% tax overall. Eg something like $180k total income.‘This change only affects a small number of shareholders who have no tax liability and use imputation credits to receive a cash refund.
People will still be able to use imputation credits to reduce their tax liability to zero.’