This type of investment offers
- Short term capital gain
- Dividend income (with 30% Imputation Credit)
- Long term capital gain (over one year)
Usually a sponsored account is opened with a Share broker and
the trustees can buy and sell shares on behalf of the DIY Super Fund.
All profits on share trading are included in income and
15% tax is paid at the time of lodging income tax return. If a share is sold after
one year only 2/3 of profit is taxable or only 10% tax (2/3rd of 15%) is paid
at the time of lodging income tax return.
Most Australian companies pay Fully Franked Dividends (income
is $100 but only $70 is paid in cash and the remainder $30 is imputed credit
or tax already paid). All dividends received are grossed up and are taxable
to the DIY Super Fund. However only 15% is paid in tax. The remainder ($15 in
our example) 15% tax paid can be used as income tax credit on other income or
income tax credit on contributions.
Australian Stock exchange is only 2% of the global equities
market. DIY Super Fund can buy and sell shares in Stock exchanges of other countries
as well. Please contact our office for a complete list.
Assume Profit $6,000
If sold within 12 Months
Full $6,000 is taxed at @ 15%
If sold after 12 Months 1/3 discount
$ 4,000 is taxed at @ 15%
Capital Losses are to be offset against any gain before discount applies
Dividend Fully Franked
$14,000
|
14,000 |
Imputation Credit $6,000
|
6,000 |
Contribution Received$10,000
|
10,000 |
Capital Gain $12,000
|
8,000 |
(more than One year)
|
6,000 |
Capital Gain $6,000(Less
than one year)
|
-1000 |
Audit Fees and Bank Charges
etc $1,000
|
Profit
43,000 |
|
Tax @ 15%
$ 6,450 |
|
Less Imp
Cr $ 6,000 |
|
Balance $
450 |
If Fund is Paying an Allocated Pension than Income
Tax is $0 and the Full Imp Credit of $ 6,000 will be Refunded by the tax office.
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