The totally off-topic thread

[TomVexille]

I wonder what Whitecat has signed Blackcat20 up to .

Hopefully 30k points

 

[medhead]

There was some stuff about taxing super. Ignoring certain elements of this linked story, it does provide a fairly reasonable outline of the underlying issues.

Why Hockey will have to clean up Costello's superannuation mess in May budget

Tax-free payouts are quite sensible in theory. After all, withdrawals from bank accounts are tax-free. That is because the income that goes into the account is already taxed, and the interest earned on the money in the account is already taxed. It is the same for super: tax has been paid as the money is earned and as the returns accrue, albeit at concessional rates.
But the earnings of super accounts stop being taxed when the retiree begins to take money out.

It says a small group of 24,000 retires receives average super payouts of $216,000 a year – all tax free. Non-retirees earning a fraction of that income pay tax.

The quotes are a bit cut down. But I've tried to only quote the issue involved,to avoid accusations raising politics.

 

[drron]

Sorry but I think that ASFA are doing these sort of press releases for one reason only-to get their hands on more funds to extract more fees.
Lets think of someone who has $2 million in super and has retired.If they take the safe route and invest in straight income products they will be lucky to get 3% pa at the moment and less if the Reserve bank cuts interest rates again.So income of $60000 per year.Rich-hardly.
They could though invest in shares or real estate and do well at the moment.But with Australia's income falling and debt levels rising the risks of a downturn are getting higher.And I am not talking about Government debt.Household debt is now running at slightly more than 150% of GDP,mortgage debt is 90% of GDP.They run a not insignificant risk of loss in the medium term.
What the ASA wants is to force those in Super to be compelled to buy Annuities.Recipe for smiles at AFSA and pain foor those retiring.The UK has just realised that people get ripped off this way and are allowing people to have alternatives.
Politics has nothing to do with this issue except that politicians of all colours are being led up the proverbial garden path.

 

[medhead]

Sorry but I think that ASFA are doing these sort of press releases for one reason only-to get their hands on more funds to extract more fees.
Lets think of someone who has $2 million in super and has retired.If they take the safe route and invest in straight income products they will be lucky to get 3% pa at the moment and less if the Reserve bank cuts interest rates again.So income of $60000 per year.Rich-hardly.
They could though invest in shares or real estate and do well at the moment.But with Australia's income falling and debt levels rising the risks of a downturn are getting higher.And I am not talking about Government debt.Household debt is now running at slightly more than 150% of GDP,mortgage debt is 90% of GDP.They run a not insignificant risk of loss in the medium term.
What the ASA wants is to force those in Super to be compelled to buy Annuities.Recipe for smiles at AFSA and pain foor those retiring.The UK has just realised that people get ripped off this way and are allowing people to have alternatives.
Politics has nothing to do with this issue except that politicians of all colours are being led up the proverbial garden path.

Not sure how increasing the tax take achieves getting their hands on more money. It would tend to decrease the money in super. Not that that is really the issue raised. The issue is not taxing super at all for those over 60. It is a good argument to tax either the earnings or the payments, but not both. that story also raises super earnings of $200000 as a well off point. Note the measure is the earnings. As such it is not suggesting that it applies to your hypothetical person with $2 million earning $60000. It is worthwhile keeping this in focus instead of extending outside scope of the suggestion.

 

[drron]

Those over 60 still get taxed on their super if they have not retired.I am 68,still working,still paying 15% on contributions and 15% on earnings in the non retired part of my fund.
They will get their hands on the money due to other press releases they have made-no more lump sums and compulsory annuities.
First they need to get the Pollies and public onside hence attack the rich.A winner every time.But there just aren't that many rich folks and the really rich are not using super as their main vehicle of wealth accumulation and legal tax minimisation.

You should read the current Senate committee inquiry into multinational companies and tax to see how little the Pollies and main stream media understand the real world.Continue to ask why Apple pays only $80 million tax on $6 billion of revenue.Told their Australian profit is $252 million and the dunderheads keep going on about the $6 billion.Explained to them that Apple have to get ATO approval each year for matters such as transfer pricing but Dastardly,Nomines and Xenophobia still don't get it.

Most ridiculous proposal put up by Dastardly was that the companies should pay the tax where the customers are.So Australia would lose the tax paid by BHP etc because their customers are in China.Great thinking.

 

[medhead]

Sounds like a visit to a financial planner type is in order. It should be possible to not pay super tax with the correct arrangement.

As for the rest of that political BS, it's always a good laugh to call names while pretending the real issue don't exist. As for attacking the rich, hardly. What did hockey say about leaners and lifters? I say if you've set up to pay no super tax on $200000 earnings, get the part pension and valuable concession card that sounds like a leaner. According to Mr Hockey the leaners are in the crosshairs.

 

[JohnM]

Sounds like a visit to a financial planner type is in order. It should be possible to not pay super tax with the correct arrangement.

As Drron says, no matter what your age, funds held in the accumulation phase of superannuation are taxable 15% on deposit into the fund and earnings of the fund are taxed at 15%.

Once funds are moved into the drawdown phase (by meeting a condition of release - ie. retiring or being over 65) the earnings of the fund are no longer taxed (and the payments are tax-free in the hands of the recipient).

The two phases are quite separate entities; you quite literally need to move funds from the accumulation phase account into a completely new drawdown phase account.

 

[medhead]

As Drron says, no matter what your age, funds held in the accumulation phase of superannuation are taxable 15% on deposit into the fund and earnings of the fund are taxed at 15%.

Once funds are moved into the drawdown phase (by meeting a condition of release - ie. retiring or being over 65) the earnings of the fund are no longer taxed (and the payments are tax-free in the hands of the recipient).

The two phases are quite separate entities; you quite literally need to move funds from the accumulation phase account into a completely new drawdown phase account.

My comment wasn't to dispute that basic situation. It was to mention that there are other options. Like many people are doing, that is all possible to do and therefore not get taxed on earnings. So while this information is interest it doesn't address my point. Wasn't it K. Packer who mentioned getting your head read if you pay more tax than you have to?

 

[get me outta here]

According to my dentist, all the stress of organising F trips for holidays has been so bad that I have been grinding my teeth during the night and he recommends I get a mouth guard for sleeping. Anyone have any idea what sort to get and from where?

 

[JohnM]

My comment wasn't to dispute that basic situation. It was to mention that there are other options. Like many people are doing, that is all possible to do and therefore not get taxed on earnings. So while this information is interest it doesn't address my point. Wasn't it K. Packer who mentioned getting your head read if you pay more tax than you have to?

Your comment specifically mentioned super tax. In that context, I was pointing out that the 15% tax on contributions and earnings in the accumulation phase cannot be avoided (well, for a retail or industry fund - some SMSF trustees may play games.)

Once super is in drawdown phase, it becomes an irrelevant question as no tax is demanded.

 

[medhead]

Your comment specifically mentioned super tax. In that context, I was pointing out that the 15% tax on contributions and earnings in the accumulation phase cannot be avoided (well, for a retail or industry fund - some SMSF trustees may play games.)

Once super is in drawdown phase, it becomes an irrelevant question as no tax is demanded.

My comment also specifically mentioned changing arrangements to avoid super tax. Making a change!!!

Drawdown phase is NOT irrelevant. It is precisely the point. As per the story I linked, people are not paying tax on their super earnings, because of their structure. I have clearly suggested changing structure. In that situation this accumulation/ drawdown phase stuff is the irrelevance. Changing structure would make it irrelevant. As I said, all very interesting but nothing to do with what I'm banging on about.

It's not a game either, all legal and above board.

 

[TomVexille]

According to my dentist, all the stress of organising F trips for holidays has been so bad that I have been grinding my teeth during the night and he recommends I get a mouth guard for sleeping. Anyone have any idea what sort to get and from where?

I think your dentist is recommending a custom one that he would make. I used to have one (am still supposed to) since I'm a serial grinder.

 

[Cynicor]

According to my dentist, all the stress of organising F trips for holidays has been so bad that I have been grinding my teeth during the night and he recommends I get a mouth guard for sleeping. Anyone have any idea what sort to get and from where?

Over the counter splints aren't great. Generally custom moulded by the said dentist is the way to go. And earns them/costs you $. But probably worth it esp if you get symptoms such as regular headaches.

 

[get me outta here]

Thanks, it's more the pain above the teeth and referred into the ear. Never needed this before when I have been really stressed. Maybe my teeth are getting old.

I think your dentist is recommending a custom one that he would make. I used to have one (am still supposed to) since I'm a serial grinder.

Over the counter splints aren't great. Generally custom moulded by the said dentist is the way to go. And earns them/costs you $. But probably worth it esp if you get symptoms such as regular headaches.

 

[Major]

My birthday today. Three score and ten. Never thought I would make it. I put it down to regular red wine, long haul in J, good friends and a supportive family

I can remember buying Hill of Grace for about $8 and I also bought a case of 72 Grange for $9.99 per bottle in the late 70's. The Tooth Brewery bought Penfolds and needed cash so they dumped all the Grange stock on the market.

I have no intention of drinking any less nor do I intend to curb my travel. Life is too short not to enjoy your favourite things.

Lunch was fresh seafood with a bottle of (Blackcat20) Taittinger and there will be a special bottle of red with dinner.

Life is good

 

[Hvr]

According to my dentist, all the stress of organising F trips for holidays has been so bad that I have been grinding my teeth during the night and he recommends I get a mouth guard for sleeping. Anyone have any idea what sort to get and from where?

I guess it's lucky you're organising F travel and not Y!

 

[blackcat20]

I'm really starting to wonder about the people in my neighbourhood. Before work this morning I spotted a man in my yard helping himself to my feijoas. I confronted him, and made him hand over the fruit. He's not the first fruit thief I've caught on my property. Then this afternoon I get home to find someone has pruned my trees, and dumped all the cuttings in the garden. We recently had a council inspection of vegetation and mine had passed, so not like it was an issue.... funny how they waited for the first day of me not being home to come round and do some cutting....

 

[drron]

Congratulations Major.
A perfect recipe for a happy life!

 

[straitman]

My birthday today. Three score and ten. Never thought I would make it. I put it down to regular red wine, long haul in J, good friends and a supportive family

I can remember buying Hill of Grace for about $8 and I also bought a case of 72 Grange for $9.99 per bottle in the late 70's. The Tooth Brewery bought Penfolds and needed cash so they dumped all the Grange stock on the market.

I have no intention of drinking any less nor do I intend to curb my travel. Life is too short not to enjoy your favourite things.

Lunch was fresh seafood with a bottle of (Blackcat20) Taittinger and there will be a special bottle of red with dinner.

Life is good

Happy birthday Major, you youngster :!:

 

[penegal]

My birthday today. Three score and ten. Never thought I would make it. I put it down to regular red wine, long haul in J, good friends and a supportive family

I can remember buying Hill of Grace for about $8 and I also bought a case of 72 Grange for $9.99 per bottle in the late 70's. The Tooth Brewery bought Penfolds and needed cash so they dumped all the Grange stock on the market.

I have no intention of drinking any less nor do I intend to curb my travel. Life is too short not to enjoy your favourite things.

Lunch was fresh seafood with a bottle of (Blackcat20) Taittinger and there will be a special bottle of red with dinner.

Life is good

Wishing you a very happy and healthy birthday!!