Bill Shorten caused quite a stir last week as Labor proposed a policy of removing the cash refunds for franking credits that some investors currently receive. While the changes affect a relatively small number of people compared to the broad Australian taxation system, it’s hard to ignore the serious impact they could have on some self-funded retirees. Given the importance of the issue to investors, we took the opportunity to sit down with Dr Don Hamson from Plato Investment Management, who are specialists in retirement and income. We discussed some common mistakes that investors make, how to avoid a dividend trap, and heard his views on the suggested changes to dividends.
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thanks, it all helps us navigate the coming minefield
You have forgotten about the large number of those retired that use "wrap accounts" or "master funds" that would have the same affect as those in SMSF's
Great overview of the franking 'topic de jour'. Please follow up with strategies to turn this possible necessity into an opportunity.
I cannot agree that the proposal from Bowen & Shorten only affects a small number of taxpayers? Today its supposedly 10% but overtime as more taxpayers retire and move into pension stage(nil tax ) they will lose excess franking credits. This proposal will affect generations of taxpayers to come and we are not talking small losses? Work it out over 10 years retirement.
Not quite right Robert, as roughly the same number of people retire each year as die each year so the number would be roughly static.
1.7 million people isn't a small number of people, elections, these days, are won by a handful of votes. Using that phrase is similar to Shorten sighting one taxpayer who apparently receive a substantial franking credit refund, even though the rules regarding super funds have changed significantly since that event, as a reason for him proposing the change.