Question: If my super fund has US exposure via ETFs, will the growth in their value compensate for not having franking credits like we receive on Australian shares?
Answer (By Paul Rickard): Potentially, yes. One of the reasons you invest offshore is that the Australian share market will sometimes underperform overseas markets. For example, if you compare the period since the GFC (from 2009) to today, the US share market has materially outperformed the Australian market. Even when the benefit of franking credits is added back in, you would still have enjoyed a higher return if you had invested offshore.
Question 2: We have a house in our SMSF purchased in 2010. If we sell the house, should we have to pay any capital gains tax (CGT) on the capital gains?