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My SMSF is in pension mode. I have 2 queries. Firstly, my average holding price for BHP shares is $31.50, rather than the $15.00 which you quote in your example. Is the buy-back still as attractive ?
Secondly, is the offer still attractive if there is a big ASX-200 rout over the next few weeks, implying a much lower BHP price ?
A: Yes. If your SMSF is in pension mode, your cost price will not impact. From a taxation point of view, it will still be very attractive. If you go back to my article (see https://switzersuperreport.com.au/bhps-buyback-a-no-brainer-for-some-shareholders/ ), you will see that I also gave an example for a cost base of $40.
If the market weakens, the buyback price will reduce, reducing the dividend component. This makes the buyback less attractive, but it will still be very attractive compared to selling BHP shares on market. And, you will potentially be able to buy the BHP shares back on market at a cheaper price.
