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Paul, what banks can I invest in today to capture the next round on interest payments?
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We have a house under our SMSF, purchased in 2010. If we sell the house, should we have to pay any CGT on the capital gains?
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Is there a sleeping problem attached to the power of dividend reinvestments, and what approaches can we use to ease the pain of future capital gains?
I started small investing small amounts in quality shares, some 20 years ago, and took advantage of the benefits offered by dividend reinvestment. It felt good growing my portfolio and adding extra shares at a lower cost and watching the portfolio value compound over time.
I am now retired, and using the income from my portfolio to supplement my living costs. I am also at the point where I would benefit from re balancing my portfolio, because of an over strong bias in some investment categories.
In order to re balance, I would need to sell some share parcels, purchased up to twenty years previously. Using WOW as an example, my average entry price has been $10, and CBA is $16. This is a powerful testimony to the benefits of compounding, but any re balancing of holdings means a harvest of a pro-rata capital gains.
I also know that at some stage I will exit this world and wonder if I do nothing, am I passing a capital gains memento onto the benefactors of my estate?
I know no one ever went broke taking a profit, but I feel if not handled with care, there may be a dark side to dividend reinvestment and the power of compounding.
Do you have any suggestions to help brighten the potential dark side of dividend reinvestment?
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Have you issued any information on the GPT Security Purchase Plan? Opened 2 Feb, and Closes 25 Feb.
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Initially I’d like to say thank you for all the great information. It is really helping me to manage my SMSF.
My question relates to the taxation treatment of a lump sum from a SMSF for a person who is retired, and is in the 55-59 age category.
I understand that any lump sum is proportioned between your taxable and non-taxable percentage, and that the first $180k of your taxable component is in fact tax free.
My question is, is the lump sum still added to your taxable income for income tax purposes, and if so what are the implications? For example, if it is added, I guess you would have to pay the Medicare levy (if income exceeds $20542) and you’d lose any low income supplement (again if income exceeds the tax free threshold).
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Dividends derived from overseas investments don’t carry franking credits, which our super fund regards as a significant benefit from owning Australian investments. Is this factored in, when recommending investing offshore?
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