1 00:00:11,520 --> 00:00:14,800 Speaker 1: Hello and welcome to The Australian's Money Puzzled podcast. I'm 2 00:00:14,880 --> 00:00:18,520 Speaker 1: James Kirby. Welcome aboard everybody. Now you've probably seen a 3 00:00:18,560 --> 00:00:23,080 Speaker 1: lot of coverage across media, across social media on inheritance 4 00:00:23,360 --> 00:00:27,120 Speaker 1: issues and death taxes in super It's time, I think 5 00:00:27,320 --> 00:00:30,760 Speaker 1: importantly to clear the air on this. Okay, what's going on? 6 00:00:31,120 --> 00:00:33,960 Speaker 1: Has something actually changed in relation to inheritance and do 7 00:00:34,000 --> 00:00:38,600 Speaker 1: you actually understand about inheritance and your money in Australia. 8 00:00:38,680 --> 00:00:41,440 Speaker 1: So officially you know we have no inheritance tax, but 9 00:00:41,560 --> 00:00:45,200 Speaker 1: in reality there are things you should know. I also 10 00:00:45,360 --> 00:00:50,720 Speaker 1: want to talk about this year, bring you up to 11 00:00:50,800 --> 00:00:54,240 Speaker 1: date on changes to super and super caps and limits 12 00:00:54,600 --> 00:00:57,600 Speaker 1: which you should need to get on top of. Now 13 00:00:57,640 --> 00:01:00,760 Speaker 1: it's February, okay. See, this is all about what you 14 00:01:00,800 --> 00:01:03,279 Speaker 1: can do and what's different this year being the financial 15 00:01:03,360 --> 00:01:05,720 Speaker 1: year to the end of June. My guest today is 16 00:01:05,800 --> 00:01:09,640 Speaker 1: Hugh Robertson of center Or Financial Services. He's a veteran 17 00:01:09,760 --> 00:01:13,960 Speaker 1: of the Baron's Top Advisor's List Our Baron's List. 18 00:01:13,959 --> 00:01:17,640 Speaker 2: How are you, Hugh, I'm good, James, Happy New Year? 19 00:01:17,720 --> 00:01:20,520 Speaker 1: Happy are you saying Happy New Year to people in February? 20 00:01:20,560 --> 00:01:24,480 Speaker 1: You have to stop now January thirty. January thirty is 21 00:01:24,480 --> 00:01:26,960 Speaker 1: a cutoff. It's a cut off point. But thank you. 22 00:01:27,040 --> 00:01:29,640 Speaker 1: I do appreciate the sentiment. I should have called you. 23 00:01:29,680 --> 00:01:32,000 Speaker 1: I should have called you a stalwart maybe of the 24 00:01:32,080 --> 00:01:34,720 Speaker 1: of the list. A veteran. I always WinCE, you know 25 00:01:34,760 --> 00:01:36,720 Speaker 1: when people call me a veteran of anything, But it's 26 00:01:36,720 --> 00:01:39,920 Speaker 1: normally mention a laudatory fashion, and I mean it in 27 00:01:39,959 --> 00:01:42,760 Speaker 1: a loadatory fashion, just so we don't get off on 28 00:01:42,880 --> 00:01:47,039 Speaker 1: the wrong foot at the start. Okay, now, thank you. 29 00:01:48,680 --> 00:01:52,040 Speaker 1: Let's just clear the air first of all about inheritance tax. 30 00:01:52,400 --> 00:01:57,440 Speaker 1: There is officially no inheritance tax in Australia, but there 31 00:01:57,480 --> 00:02:02,160 Speaker 1: has been a lot of token headlines about it because 32 00:02:02,920 --> 00:02:05,480 Speaker 1: I think people starting to realize there is inheritance tax 33 00:02:05,520 --> 00:02:08,200 Speaker 1: for practical purposes and super And then on top of that, 34 00:02:08,360 --> 00:02:12,160 Speaker 1: something changed in relation to death taxes in the new 35 00:02:12,200 --> 00:02:15,000 Speaker 1: super tax, and that's sort of basically put cat among 36 00:02:15,000 --> 00:02:19,200 Speaker 1: the pigeons. Could you explain first of all to everybody 37 00:02:20,040 --> 00:02:23,880 Speaker 1: about inheritance tax and super So most people have two 38 00:02:25,080 --> 00:02:27,640 Speaker 1: if they have their house and they have their super 39 00:02:27,680 --> 00:02:29,680 Speaker 1: that's where most of the money is. And long ago 40 00:02:29,720 --> 00:02:31,560 Speaker 1: there was people had nothing in Super. Most people had 41 00:02:31,600 --> 00:02:33,440 Speaker 1: nothing in super, so it didn't matter. But it turns 42 00:02:33,480 --> 00:02:35,880 Speaker 1: out of you inherit. If you inherit super as an 43 00:02:35,880 --> 00:02:38,440 Speaker 1: adult dependent, which most people are when they inherit SUPER 44 00:02:38,560 --> 00:02:41,040 Speaker 1: from their parents, you actually pay tax on it. So 45 00:02:42,040 --> 00:02:45,600 Speaker 1: what's the tax? How much is it and is there 46 00:02:45,639 --> 00:02:47,119 Speaker 1: any way around paying it? 47 00:02:48,400 --> 00:02:51,280 Speaker 3: Yeah? I think this is a really good conversation point 48 00:02:51,280 --> 00:02:53,880 Speaker 3: for everyone because it's probably one of the issues we 49 00:02:53,960 --> 00:02:58,000 Speaker 3: see most within our own clients. And what we're really 50 00:02:58,000 --> 00:03:02,239 Speaker 3: trying to ascertain he is, you've got a taxable component, 51 00:03:02,280 --> 00:03:05,200 Speaker 3: which is the amount in your superannuation that has gone 52 00:03:05,200 --> 00:03:07,760 Speaker 3: in and you've got a tax benefit for or your 53 00:03:08,280 --> 00:03:11,280 Speaker 3: your employee, your employer has put that contribution in for you. 54 00:03:11,800 --> 00:03:14,600 Speaker 1: So, Hugh, that's the two ways you put money into super. Right, 55 00:03:14,600 --> 00:03:16,480 Speaker 1: There's a compulsory way, whether you like it or not, 56 00:03:16,520 --> 00:03:21,400 Speaker 1: and there's a voluntary way, okay, and explain. Then if 57 00:03:21,440 --> 00:03:23,680 Speaker 1: you put it in the the if you put it 58 00:03:23,720 --> 00:03:27,800 Speaker 1: in in ANYA, either of those two ways, that's a 59 00:03:27,880 --> 00:03:30,720 Speaker 1: taxable component, right, So that's going to be have inheritance 60 00:03:30,800 --> 00:03:31,760 Speaker 1: tax at the far end. 61 00:03:31,960 --> 00:03:34,200 Speaker 3: If you if you put in a voluntary and claim 62 00:03:34,240 --> 00:03:36,640 Speaker 3: a tax reduction for it, whether that be via you've 63 00:03:36,640 --> 00:03:38,960 Speaker 3: done it as salary sacrifice or you've claimed it after 64 00:03:39,040 --> 00:03:42,480 Speaker 3: the fact, that will sit as what's called taxable component 65 00:03:42,640 --> 00:03:43,760 Speaker 3: inside your superannuation. 66 00:03:43,960 --> 00:03:46,480 Speaker 1: And telling me the SGC the part of the twelve 67 00:03:46,520 --> 00:03:48,800 Speaker 1: percent you must put in is that also treated the 68 00:03:48,800 --> 00:03:49,840 Speaker 1: same fashion. 69 00:03:49,560 --> 00:03:52,040 Speaker 2: That's also treated as a taxable component. 70 00:03:52,120 --> 00:03:54,160 Speaker 3: So if you think about it that you get the benefit, 71 00:03:54,600 --> 00:03:57,640 Speaker 3: you get the tax benefit for it going in, it's 72 00:03:57,680 --> 00:03:59,160 Speaker 3: going to sit as taxable component. 73 00:03:59,760 --> 00:04:01,960 Speaker 1: When I'm sorry to jump in on you here, but 74 00:04:02,000 --> 00:04:04,080 Speaker 1: I'm trying to keep it really clear for the for 75 00:04:04,200 --> 00:04:08,000 Speaker 1: the everyday listener who isn't an expert. So, folks, for 76 00:04:08,160 --> 00:04:12,520 Speaker 1: most people, most of the time you're super, you put 77 00:04:12,520 --> 00:04:14,840 Speaker 1: it in whether you wanted to or not, compulsory twenty 78 00:04:14,880 --> 00:04:17,400 Speaker 1: percent of your salary or maybe you did some voluntary 79 00:04:17,480 --> 00:04:22,320 Speaker 1: top ups under the concessional scheme, pre tax scheme, voluntary sacrifice. 80 00:04:22,560 --> 00:04:25,480 Speaker 1: All that money that ever went into your super. When 81 00:04:26,160 --> 00:04:29,120 Speaker 1: that comes out the other end and it's in your 82 00:04:29,240 --> 00:04:33,600 Speaker 1: estate and an adult child dependent is going to inherit it, 83 00:04:33,760 --> 00:04:35,520 Speaker 1: they're going to pay tax on it. Most people don't 84 00:04:35,560 --> 00:04:38,520 Speaker 1: know that. What's roughly most of the time, what's the 85 00:04:38,560 --> 00:04:39,039 Speaker 1: tax on it? 86 00:04:39,120 --> 00:04:41,960 Speaker 3: You ends up being an If you look at the 87 00:04:42,000 --> 00:04:45,720 Speaker 3: majority of superannuation balances, it's usually about eighty to eighty 88 00:04:45,760 --> 00:04:49,080 Speaker 3: five percent is the taxable component. When someone you know, 89 00:04:49,200 --> 00:04:52,400 Speaker 3: sort of passes from our client experience that that number, 90 00:04:52,640 --> 00:04:53,960 Speaker 3: and from there they can be up to about a 91 00:04:54,040 --> 00:04:57,080 Speaker 3: seventy up to seventeen percent death tax, fifteen percent plus 92 00:04:57,120 --> 00:05:02,599 Speaker 3: medicare and going to adult non dependent children. So we 93 00:05:02,720 --> 00:05:05,599 Speaker 3: call it a de facto death tax because unless the 94 00:05:05,640 --> 00:05:08,080 Speaker 3: client can make the moves around it, that's what it 95 00:05:08,120 --> 00:05:09,159 Speaker 3: looks like they'll be up for. 96 00:05:09,200 --> 00:05:09,720 Speaker 2: Plus the. 97 00:05:11,160 --> 00:05:13,320 Speaker 3: Probably to add to your point before James as well, 98 00:05:13,640 --> 00:05:16,919 Speaker 3: the earnings also within the fund set is taxable. 99 00:05:16,480 --> 00:05:18,520 Speaker 1: Okay, so really most money. 100 00:05:19,080 --> 00:05:21,800 Speaker 3: So it's a really important, really important to understand your 101 00:05:21,839 --> 00:05:25,080 Speaker 3: superannuation statements and what are the strategies are that we 102 00:05:25,080 --> 00:05:26,920 Speaker 3: can do to reduce four clients? 103 00:05:27,720 --> 00:05:31,120 Speaker 1: Okay, so it just two generations, I suppose listen and 104 00:05:31,480 --> 00:05:35,880 Speaker 1: to whom it's relevant when you contribute to super that 105 00:05:36,040 --> 00:05:38,880 Speaker 1: money most of the time for most people, when it 106 00:05:38,880 --> 00:05:40,400 Speaker 1: comes out to the other end and someone's going to 107 00:05:40,400 --> 00:05:43,039 Speaker 1: inherit it, they're going to pay fifteen plus Madickey, they 108 00:05:43,080 --> 00:05:46,839 Speaker 1: gonna pay seventeen percent or so on the super they inherit, 109 00:05:47,400 --> 00:05:50,679 Speaker 1: which is a surprise perhaps to many people, because everything 110 00:05:50,720 --> 00:05:53,159 Speaker 1: as you inherit it is tax free. That's part one. 111 00:05:53,160 --> 00:05:57,120 Speaker 1: We'll talk about how you might avoid that in a second. Now, 112 00:05:57,160 --> 00:06:01,640 Speaker 1: on top of that the confusion and consternation in various 113 00:06:01,720 --> 00:06:05,719 Speaker 1: quarters about us a change in the new supertax in 114 00:06:05,760 --> 00:06:10,240 Speaker 1: relation to inheritance and death tax again, which as I say, 115 00:06:10,279 --> 00:06:13,720 Speaker 1: has sparked all sorts of interest, but very simply got 116 00:06:13,880 --> 00:06:15,840 Speaker 1: I'll try and explain to listeners what happened, and then 117 00:06:15,920 --> 00:06:18,520 Speaker 1: maybe you might put it into context. You in the 118 00:06:18,600 --> 00:06:22,480 Speaker 1: new supertax very simply. In the original version pre Christmas, 119 00:06:23,560 --> 00:06:27,160 Speaker 1: when as someone died and they had super tax obligations, 120 00:06:27,839 --> 00:06:33,040 Speaker 1: the tax man only wanted the taxable bill they wanted. 121 00:06:33,120 --> 00:06:35,680 Speaker 1: They wanted it, they compiled it at the end of 122 00:06:35,720 --> 00:06:39,400 Speaker 1: the financial year over Christmas. In the new version that's 123 00:06:39,440 --> 00:06:41,680 Speaker 1: now before Parliament, there was a thing called an integrity 124 00:06:41,720 --> 00:06:43,880 Speaker 1: measure and they changed it and they said on an 125 00:06:43,920 --> 00:06:47,120 Speaker 1: ongoing basis it will be based the tax bill will 126 00:06:47,120 --> 00:06:50,159 Speaker 1: be based on whichever is highest the start of the 127 00:06:50,240 --> 00:06:53,240 Speaker 1: year or the end of the year. Hence, if you 128 00:06:53,320 --> 00:06:55,840 Speaker 1: die at the wrong time of the year, basically your 129 00:06:55,880 --> 00:06:58,360 Speaker 1: bill will be bigger. People didn't see this one coming. 130 00:06:58,600 --> 00:07:02,599 Speaker 1: It's like it's like it's technical, it doesn't affect millions 131 00:07:02,600 --> 00:07:05,880 Speaker 1: of people, but people did not like it. Could you 132 00:07:05,880 --> 00:07:10,440 Speaker 1: explain just why it roughered a lot of feathers. 133 00:07:11,320 --> 00:07:14,360 Speaker 3: I'm a big believer that we have sort of you know, 134 00:07:14,360 --> 00:07:16,280 Speaker 3: that we've got to stick by our handshake deals that 135 00:07:16,320 --> 00:07:19,920 Speaker 3: we make, you know, within Australia. And if we've kind 136 00:07:19,960 --> 00:07:22,640 Speaker 3: of enticed people to you know, self fund for their 137 00:07:22,640 --> 00:07:27,080 Speaker 3: own retirement, we really shouldn't be changing the rules for. 138 00:07:27,080 --> 00:07:28,560 Speaker 2: The people that have contributed to it. 139 00:07:28,840 --> 00:07:30,720 Speaker 3: Because the one thing we want all the strains to 140 00:07:30,720 --> 00:07:33,880 Speaker 3: do is have confidence in the retirement system, you know, 141 00:07:33,960 --> 00:07:36,280 Speaker 3: so that they can self fund. We want to provide 142 00:07:36,320 --> 00:07:39,680 Speaker 3: incentive for people to do that. And I know, even 143 00:07:39,720 --> 00:07:42,600 Speaker 3: just among our clients now as we're talking, they really 144 00:07:42,680 --> 00:07:47,400 Speaker 3: lack that confidence in the retirement system above those high amounts. 145 00:07:47,440 --> 00:07:51,920 Speaker 3: So what the consequence there? I see, We've got, you know, 146 00:07:51,920 --> 00:07:54,880 Speaker 3: there's some consequential errors there in that. Instead of people 147 00:07:54,880 --> 00:07:57,320 Speaker 3: now contributing to super to really grow that balance, which 148 00:07:57,360 --> 00:08:00,400 Speaker 3: is absolutely you know a top priority in everybody should 149 00:08:00,400 --> 00:08:03,200 Speaker 3: be doing that, that's era number one, they might then 150 00:08:03,320 --> 00:08:07,120 Speaker 3: be you know more needy on the welfare system in retirement. 151 00:08:07,640 --> 00:08:09,880 Speaker 3: The problem number two is if they want tax reeductions 152 00:08:09,920 --> 00:08:13,440 Speaker 3: instead of utilizing superannuation contributions to get your tax reduction, 153 00:08:13,880 --> 00:08:16,560 Speaker 3: where else can you get tax reductions, James, I could 154 00:08:16,640 --> 00:08:19,800 Speaker 3: go buy an investment property and get negative gearing. So 155 00:08:20,040 --> 00:08:22,240 Speaker 3: now we've got an issue that we have people not 156 00:08:22,360 --> 00:08:25,680 Speaker 3: utilizing superannuation, which we really want them to do, but 157 00:08:25,760 --> 00:08:28,480 Speaker 3: they are now going to buying investment properties to get 158 00:08:28,480 --> 00:08:31,440 Speaker 3: the tax you know, the tax reduction, which is probably 159 00:08:31,440 --> 00:08:34,280 Speaker 3: not the intent of you know why we want people 160 00:08:34,280 --> 00:08:35,480 Speaker 3: buying investment properties. 161 00:08:35,600 --> 00:08:39,360 Speaker 1: Yeah, okay, So they are the rules, if you like, 162 00:08:39,440 --> 00:08:42,240 Speaker 1: of the confidence in the in the confidence of the 163 00:08:42,280 --> 00:08:45,880 Speaker 1: headline that we don't have an inheritance tax. Okay. Just 164 00:08:45,960 --> 00:08:51,600 Speaker 1: to explain to then people who say, apparently there's a 165 00:08:51,640 --> 00:08:57,280 Speaker 1: way that they can reduce that tax bill on my 166 00:08:57,520 --> 00:09:00,960 Speaker 1: stage in the future, how would I do? How would 167 00:09:00,960 --> 00:09:02,600 Speaker 1: I do it? Let's say I have let's say I 168 00:09:02,600 --> 00:09:05,200 Speaker 1: have myself as super fund and there's an X amount 169 00:09:05,240 --> 00:09:07,520 Speaker 1: in it, and I'm saying, damn it, I don't want 170 00:09:07,559 --> 00:09:10,120 Speaker 1: my two kids to pay seventeen percent tax on this. 171 00:09:10,559 --> 00:09:13,200 Speaker 1: Because I've put a lot of time and effort into it, 172 00:09:13,880 --> 00:09:16,600 Speaker 1: and I hope at least by the time I pass 173 00:09:16,640 --> 00:09:19,440 Speaker 1: on it would be a handsome amount. How can I 174 00:09:19,480 --> 00:09:21,600 Speaker 1: do to reduce that seventeen percent tax but that they're 175 00:09:21,600 --> 00:09:22,600 Speaker 1: going to face in the future. 176 00:09:23,559 --> 00:09:24,640 Speaker 2: That's a great question. 177 00:09:24,760 --> 00:09:28,880 Speaker 3: There's two sort of dominant strategy if we can do. 178 00:09:29,440 --> 00:09:31,720 Speaker 3: The first is you tell us the day before you die, 179 00:09:32,160 --> 00:09:33,480 Speaker 3: and we can we can take. 180 00:09:33,360 --> 00:09:35,760 Speaker 1: Tricky tricky when I mightn't be in a position to 181 00:09:35,800 --> 00:09:37,560 Speaker 1: call you, Hugh, I might be feeling great. 182 00:09:38,160 --> 00:09:41,680 Speaker 3: Yeah, it does seem to be, you know, quite quite 183 00:09:41,679 --> 00:09:44,080 Speaker 3: difficult that one to get the exact the exact date 184 00:09:44,160 --> 00:09:47,320 Speaker 3: right on that. So, failing that and all jokes, decide 185 00:09:47,320 --> 00:09:49,520 Speaker 3: if someone knew that they were in terminal, you know, 186 00:09:50,640 --> 00:09:52,360 Speaker 3: sort a phase of life, that they could look to 187 00:09:52,360 --> 00:09:55,240 Speaker 3: do that they get it out of the superannuation. It's 188 00:09:55,240 --> 00:09:57,760 Speaker 3: a one hundred percent tax free withdrawal and then it 189 00:09:57,760 --> 00:10:00,679 Speaker 3: would go as per their estate, or they could gift 190 00:10:00,679 --> 00:10:01,600 Speaker 3: it while they were still alive. 191 00:10:03,240 --> 00:10:05,280 Speaker 1: Yeah, I mean, this is serious stuff. But you're asking 192 00:10:05,360 --> 00:10:08,520 Speaker 1: you, a living person b City, to see take the chance 193 00:10:08,600 --> 00:10:11,000 Speaker 1: that you never need any money again. And the d 194 00:10:11,160 --> 00:10:15,880 Speaker 1: that that happens is I imagine that's from most peeper most 195 00:10:15,880 --> 00:10:17,640 Speaker 1: of the time, what's what's the other option? 196 00:10:18,559 --> 00:10:19,080 Speaker 2: The other one? 197 00:10:19,120 --> 00:10:22,400 Speaker 3: And it's probably because the superhneration rules have changed so 198 00:10:22,559 --> 00:10:24,920 Speaker 3: often a lot of people sort of aren't current with 199 00:10:25,160 --> 00:10:28,559 Speaker 3: what the age based eligibility is to think. So, if 200 00:10:28,600 --> 00:10:30,760 Speaker 3: you were retired from age sixty, you can go into 201 00:10:30,880 --> 00:10:33,600 Speaker 3: the pension phase, so your money is now one hundred 202 00:10:33,640 --> 00:10:37,719 Speaker 3: percent accessible, and from there you can actually take out 203 00:10:37,720 --> 00:10:40,160 Speaker 3: your money and recontribute it back. So if you take 204 00:10:40,200 --> 00:10:42,480 Speaker 3: it out and if you imagine if eighty five percent 205 00:10:42,520 --> 00:10:44,959 Speaker 3: of my money you had a million dollars and so 206 00:10:45,120 --> 00:10:48,520 Speaker 3: eighty five percent of it was taxable component, so eight 207 00:10:48,600 --> 00:10:52,240 Speaker 3: hundred and fifty is taxable component, I could take out 208 00:10:52,840 --> 00:10:55,600 Speaker 3: up to three hundred and sixty thousand dollars. I could 209 00:10:55,600 --> 00:10:59,959 Speaker 3: take that out and recontribute that. So we're now talk 210 00:11:00,120 --> 00:11:02,760 Speaker 3: about the non concessional contributions. You've got the one year 211 00:11:02,840 --> 00:11:05,600 Speaker 3: cap of one hundred and twenty thousand dollars, and we 212 00:11:05,640 --> 00:11:08,800 Speaker 3: can bring forward the next two financial years so that 213 00:11:08,800 --> 00:11:10,439 Speaker 3: can be that's how we get the three hundred and 214 00:11:10,480 --> 00:11:14,120 Speaker 3: sixty thousand dollars when that then, and you can recontribute 215 00:11:14,120 --> 00:11:17,600 Speaker 3: that back into superannuation when it goes back into superannuation 216 00:11:17,920 --> 00:11:21,280 Speaker 3: that now comes in because it's a non concessional contribution, 217 00:11:21,920 --> 00:11:25,360 Speaker 3: that now sits as tax free component. So I've been 218 00:11:25,400 --> 00:11:28,920 Speaker 3: able to, if you think about it, wash that taxable 219 00:11:28,960 --> 00:11:33,480 Speaker 3: component and increase decrease the taxable component, increase the tax 220 00:11:33,480 --> 00:11:36,440 Speaker 3: free component. Because I'm retired, I can still have that 221 00:11:36,520 --> 00:11:40,640 Speaker 3: three hundred and sixty thousand in another superannuation fund, roll 222 00:11:40,679 --> 00:11:42,680 Speaker 3: that into the pension phase and now that is one 223 00:11:42,760 --> 00:11:47,240 Speaker 3: hundred percent tax free. Then the strategy benefit there is 224 00:11:47,720 --> 00:11:50,160 Speaker 3: you might say, well, I really don't want to touch that. 225 00:11:50,559 --> 00:11:53,720 Speaker 3: You know that new superfund very much, but I need 226 00:11:53,800 --> 00:11:55,400 Speaker 3: I need X amount of money per year. 227 00:11:55,840 --> 00:11:57,600 Speaker 2: Or you could draw more out of the. 228 00:11:58,120 --> 00:12:01,839 Speaker 3: First superannuation fund that has that higher component of tax 229 00:12:01,840 --> 00:12:04,760 Speaker 3: bil tax free, and then after three years again I 230 00:12:04,800 --> 00:12:06,880 Speaker 3: could do the same thing. I could withdraw more money 231 00:12:06,880 --> 00:12:09,240 Speaker 3: out of my super do that, and I'm allowed to 232 00:12:09,240 --> 00:12:11,040 Speaker 3: do that up until age seventy five. 233 00:12:11,559 --> 00:12:14,440 Speaker 1: Folks do a Google on this or searching the Australian. 234 00:12:14,480 --> 00:12:18,720 Speaker 1: We've laid this out many times very carefully. But put simply, 235 00:12:19,800 --> 00:12:24,680 Speaker 1: you can cut that tax bill by recontributing to super 236 00:12:24,760 --> 00:12:28,959 Speaker 1: by that it is the ridiculous circular business of taking 237 00:12:29,520 --> 00:12:32,800 Speaker 1: your super out as if you wanted it, and then 238 00:12:32,840 --> 00:12:35,240 Speaker 1: putting it back in, and when you put it back in, 239 00:12:35,280 --> 00:12:38,439 Speaker 1: it's tax free. And each lump that you do, basically, 240 00:12:38,720 --> 00:12:42,960 Speaker 1: each portion you do, reduces their portion of the tax 241 00:12:42,960 --> 00:12:45,880 Speaker 1: bill for your inheritance in the future. Have I got 242 00:12:45,880 --> 00:12:46,360 Speaker 1: that right here? 243 00:12:46,480 --> 00:12:47,280 Speaker 2: One hundred percent? 244 00:12:47,520 --> 00:12:50,160 Speaker 1: Okay? And what's the age range I can do that. 245 00:12:50,840 --> 00:12:53,000 Speaker 1: There's you've got to stop at seventy five. 246 00:12:53,760 --> 00:12:56,960 Speaker 3: Sixty and retired or sixty five and still working up 247 00:12:57,040 --> 00:12:58,800 Speaker 3: until you turn seventy five. 248 00:12:58,840 --> 00:12:59,920 Speaker 2: You've got to do it before. 249 00:12:59,679 --> 00:13:05,000 Speaker 1: You okay, ten year window basically. Okay, very interesting. I mean, 250 00:13:05,000 --> 00:13:07,280 Speaker 1: it's one of those things that is a classic example 251 00:13:07,320 --> 00:13:12,120 Speaker 1: I think of where people if they actively examine the 252 00:13:12,200 --> 00:13:15,040 Speaker 1: system and are helped to do so by people like yourself, 253 00:13:15,080 --> 00:13:19,680 Speaker 1: you can really make a difference to their money situation 254 00:13:20,000 --> 00:13:23,920 Speaker 1: or their family's money situation. Okay, So that's inheritance tax books. 255 00:13:23,960 --> 00:13:26,720 Speaker 1: One last thing, because I've done this show a couple 256 00:13:26,760 --> 00:13:28,240 Speaker 1: of times of this issue, and I've written on a 257 00:13:28,240 --> 00:13:31,520 Speaker 1: couple of times Treasury, that is, voices from Treasury have 258 00:13:31,600 --> 00:13:34,200 Speaker 1: been in touch with me to say you're not wrong 259 00:13:34,200 --> 00:13:36,480 Speaker 1: on any of this stuff, James, but don't go any 260 00:13:36,520 --> 00:13:40,920 Speaker 1: further making predictions that it's the start of a move 261 00:13:41,000 --> 00:13:45,600 Speaker 1: towards inheritance tax in Australia. The the the Office of 262 00:13:45,720 --> 00:13:49,400 Speaker 1: the Treasure says to me that there's no way that 263 00:13:49,440 --> 00:13:52,400 Speaker 1: they would touch inheritance with the barge poll. That's what 264 00:13:52,480 --> 00:13:55,640 Speaker 1: they say. Will take them. Will take them at their word. 265 00:13:56,120 --> 00:13:59,600 Speaker 1: But we'll also tell you that things have been happening, 266 00:13:59,600 --> 00:14:02,600 Speaker 1: which road the notion that we have and in No. 267 00:14:02,679 --> 00:14:04,720 Speaker 1: One Harrison's tax in Australia, those two things sort of 268 00:14:04,720 --> 00:14:05,600 Speaker 1: sit side by side. 269 00:14:05,880 --> 00:14:06,800 Speaker 2: Yeah, sorry, Janth. 270 00:14:06,880 --> 00:14:09,120 Speaker 3: Can we just add one thing for the audience as well? 271 00:14:09,160 --> 00:14:13,600 Speaker 3: The downsizer contributions about three hundred thousand h that also 272 00:14:13,760 --> 00:14:16,320 Speaker 3: goes in as non concessional contribution. 273 00:14:16,600 --> 00:14:17,360 Speaker 1: Oh that's sweet. 274 00:14:17,440 --> 00:14:17,680 Speaker 2: Yeah. 275 00:14:17,720 --> 00:14:20,800 Speaker 1: Okay, So if you do a downsizer, if you do 276 00:14:20,840 --> 00:14:23,040 Speaker 1: a downsizer, that is, if you sell your family home 277 00:14:23,520 --> 00:14:26,760 Speaker 1: to move and put the money in the into your 278 00:14:27,000 --> 00:14:32,440 Speaker 1: super regardless of all rules around Super, you get to 279 00:14:32,480 --> 00:14:35,000 Speaker 1: put that money into Super first of all, and secondly 280 00:14:35,320 --> 00:14:39,840 Speaker 1: you cut the bill for your Okay, okay, check what's 281 00:14:39,880 --> 00:14:43,120 Speaker 1: checking out? Okay. That was pretty tricky stuff and you 282 00:14:43,240 --> 00:14:46,200 Speaker 1: did very well, I think to get through the obstacle 283 00:14:46,240 --> 00:14:49,000 Speaker 1: course that I put him through there and YouTube listeners, 284 00:14:49,000 --> 00:14:51,080 Speaker 1: but I think it was important to do. So, Okay, 285 00:14:51,200 --> 00:14:52,520 Speaker 1: we will be back in a moment and we're going 286 00:14:52,560 --> 00:14:55,080 Speaker 1: to tell you some stuff you can do much faster 287 00:14:55,400 --> 00:14:59,200 Speaker 1: and much quicker in terms of improving your financial wealth. 288 00:14:59,240 --> 00:15:10,680 Speaker 1: Back in a moment. Hello, Welcome back to The Australian's 289 00:15:10,680 --> 00:15:13,120 Speaker 1: Money Puzzlant podcast. I'm James Kirby and I'm talking to 290 00:15:13,240 --> 00:15:17,200 Speaker 1: Hugh Robertson of the Center Financial Group, who is sitting 291 00:15:17,280 --> 00:15:21,840 Speaker 1: in some splendor looking out. I'm looking out at lovely 292 00:15:22,000 --> 00:15:25,480 Speaker 1: green rolling hills and obviously, being here in Melbourne, there 293 00:15:25,520 --> 00:15:27,440 Speaker 1: are no green rolling hills at the moment. They are 294 00:15:27,480 --> 00:15:29,760 Speaker 1: kind of yellow and white at the moment. But tell 295 00:15:29,800 --> 00:15:32,120 Speaker 1: me what are we looking at there, Hugh? What's the landscape? 296 00:15:32,520 --> 00:15:34,200 Speaker 2: That's the hinter lane, So we. 297 00:15:34,520 --> 00:15:37,840 Speaker 1: The hinterland of hinterland. 298 00:15:38,240 --> 00:15:38,640 Speaker 2: Lovely. 299 00:15:39,120 --> 00:15:40,880 Speaker 3: It seems to be every time we do a podcast 300 00:15:40,920 --> 00:15:42,760 Speaker 3: we get one of these perfect days and we sort 301 00:15:42,800 --> 00:15:45,560 Speaker 3: of lament on our you know how, our living decisions. 302 00:15:45,600 --> 00:15:47,280 Speaker 2: But this one's not bad. 303 00:15:48,480 --> 00:15:51,760 Speaker 1: That's lamenting on your living decision. That's marvelous. 304 00:15:51,840 --> 00:15:52,000 Speaker 3: Yeah. 305 00:15:52,080 --> 00:15:55,360 Speaker 1: Not everybody has a has a pastoral scene, a real 306 00:15:55,400 --> 00:15:58,320 Speaker 1: life pastoral scene, not a screen shot out there window 307 00:15:58,400 --> 00:16:00,920 Speaker 1: like that. It looks really good. Okay, now, folks, we're 308 00:16:00,920 --> 00:16:02,280 Speaker 1: in the middle of the financial year. In fact, work 309 00:16:02,280 --> 00:16:05,280 Speaker 1: we'll pass the middle. It's February, and what you're going 310 00:16:05,360 --> 00:16:07,800 Speaker 1: to do in terms of super contributions or anything else 311 00:16:07,960 --> 00:16:10,040 Speaker 1: you want to do by June. Quite a few things 312 00:16:10,040 --> 00:16:12,760 Speaker 1: have changed this year, and he was just going to 313 00:16:12,760 --> 00:16:14,680 Speaker 1: give us a quick rundown. It's worth hearing what you 314 00:16:14,800 --> 00:16:16,640 Speaker 1: need to do or what you should be doing to 315 00:16:16,640 --> 00:16:19,680 Speaker 1: optimize things. For instance, I talked about the amount in 316 00:16:19,720 --> 00:16:22,560 Speaker 1: the first segment, but you must contribute to SUPER on 317 00:16:22,600 --> 00:16:26,120 Speaker 1: a compository basis. That's now twelve percent. It's creeping up 318 00:16:26,160 --> 00:16:28,200 Speaker 1: all the time. People don't realize. I mean, it's a 319 00:16:28,320 --> 00:16:31,400 Speaker 1: pretty chunky part of your salary. Twelve percent must go 320 00:16:31,440 --> 00:16:35,680 Speaker 1: into SUPER by law, this superannuation guarantee as they call it, 321 00:16:35,880 --> 00:16:38,920 Speaker 1: that actually means some changes to how much you can 322 00:16:39,040 --> 00:16:41,560 Speaker 1: voluntarily contribute. Could you just give us a quick run 323 00:16:41,600 --> 00:16:42,680 Speaker 1: through on that one, Hugh. 324 00:16:43,600 --> 00:16:46,640 Speaker 3: Yeah, So the you know, the maximum you're allowed to 325 00:16:46,960 --> 00:16:50,280 Speaker 3: contribute year by year is thirty thousand dollars. Is a 326 00:16:50,280 --> 00:16:55,440 Speaker 3: concessional contribution less what your superannuation guarantee man is, So 327 00:16:55,480 --> 00:16:57,920 Speaker 3: if you think a person's on one hundred thousand dollars, 328 00:16:57,960 --> 00:16:59,920 Speaker 3: they're going to get twelve thousands. 329 00:16:59,480 --> 00:17:01,880 Speaker 2: Their SG, they're allowed thirty. 330 00:17:01,960 --> 00:17:04,920 Speaker 3: So you've got eighteen thousand dollars that you can contribute. 331 00:17:04,920 --> 00:17:06,480 Speaker 3: So you've also got to be very careful if you've 332 00:17:06,480 --> 00:17:10,000 Speaker 3: got insurances through your super, so you're paying your premiums 333 00:17:10,040 --> 00:17:13,480 Speaker 3: through that and you're contributing extra to cover that, you know, 334 00:17:13,520 --> 00:17:18,120 Speaker 3: what's that trade off versus growing your balance. And you've 335 00:17:18,119 --> 00:17:20,680 Speaker 3: also got if you've got under five hundred thousand dollars, 336 00:17:20,800 --> 00:17:24,000 Speaker 3: remember you can go and catch up on the previous 337 00:17:24,320 --> 00:17:26,720 Speaker 3: year's contributions. If you have got less than five hundred 338 00:17:26,760 --> 00:17:29,040 Speaker 3: thousand and you haven't been contributed to your super on 339 00:17:29,080 --> 00:17:31,640 Speaker 3: a regular basis, you can go back up to five 340 00:17:31,720 --> 00:17:35,240 Speaker 3: years and kind of find the difference that you're allowed to. 341 00:17:35,800 --> 00:17:38,840 Speaker 1: So, just to clarify for listeners, you can put in 342 00:17:38,880 --> 00:17:43,639 Speaker 1: thirty thousand a year into your super pretax bisis. However, 343 00:17:44,080 --> 00:17:48,360 Speaker 1: whatever twelve percent of your salary works out as you've 344 00:17:48,359 --> 00:17:51,520 Speaker 1: got to subtract that because the thirty must include your 345 00:17:51,720 --> 00:17:56,080 Speaker 1: superinnuation guarantee. And if you have less than five hundred 346 00:17:56,080 --> 00:17:59,199 Speaker 1: thousand and your superfund. If you're in the fortunate position 347 00:17:59,280 --> 00:18:01,560 Speaker 1: that you can take a bigger slice, if you can 348 00:18:01,600 --> 00:18:03,920 Speaker 1: make your contributions bigger, you can actually do catch up. 349 00:18:03,960 --> 00:18:07,639 Speaker 1: You can actually the thirty thousand, you can multiply it 350 00:18:08,119 --> 00:18:09,639 Speaker 1: by how many years? 351 00:18:11,160 --> 00:18:11,320 Speaker 2: Yep? 352 00:18:11,400 --> 00:18:13,160 Speaker 3: So remember there's been a couple that I was twenty 353 00:18:13,200 --> 00:18:15,879 Speaker 3: seven and a half and twenty five thousand. But you 354 00:18:15,920 --> 00:18:18,720 Speaker 3: can kind of go back in time, especially if someone's 355 00:18:18,720 --> 00:18:20,800 Speaker 3: sold an investment property this year, for example. 356 00:18:21,080 --> 00:18:23,120 Speaker 2: That's probably the typical strategy. 357 00:18:23,160 --> 00:18:25,399 Speaker 3: And you can go in my gov to see what 358 00:18:25,800 --> 00:18:27,560 Speaker 3: your cap space is as well. 359 00:18:27,640 --> 00:18:30,000 Speaker 1: Oh can you I see, and they'll actually calculate it 360 00:18:30,080 --> 00:18:30,280 Speaker 1: for you. 361 00:18:31,160 --> 00:18:32,040 Speaker 2: Yeah, are very good. 362 00:18:32,160 --> 00:18:37,320 Speaker 1: Okay, so if you can remember your password. I can 363 00:18:37,359 --> 00:18:39,760 Speaker 1: remember my password, I really can. Seriously, I haven't written 364 00:18:39,800 --> 00:18:41,720 Speaker 1: on my phone. No I haven't. I have it in 365 00:18:41,720 --> 00:18:50,080 Speaker 1: my mind. Okay, those catchups, the superannuation contribution must always 366 00:18:50,119 --> 00:18:52,439 Speaker 1: be subtracted each time. So you're just talking about the 367 00:18:52,480 --> 00:18:55,400 Speaker 1: gap between the SGC and the contribution cap each year 368 00:18:55,440 --> 00:18:56,520 Speaker 1: and the catchup years, are you? 369 00:18:57,440 --> 00:18:57,680 Speaker 2: Yes? 370 00:18:57,760 --> 00:19:00,560 Speaker 3: And I think the with the being trops of people's 371 00:19:00,600 --> 00:19:03,320 Speaker 3: you know, wage, people have really got to start paying 372 00:19:03,320 --> 00:19:06,440 Speaker 3: better attention of where it's invested, you know, and if 373 00:19:06,440 --> 00:19:10,119 Speaker 3: you've got time frame to retirement, you're volatility is okay. 374 00:19:10,160 --> 00:19:12,880 Speaker 2: We know with the current you know, the current. 375 00:19:12,800 --> 00:19:14,640 Speaker 3: State of the world, there's a bit of you know, 376 00:19:15,200 --> 00:19:18,359 Speaker 3: there's a bit of drama, should we say. And you know, 377 00:19:18,600 --> 00:19:21,320 Speaker 3: long term though, shen market always goes up, so you know, 378 00:19:21,359 --> 00:19:23,920 Speaker 3: you can be confident if you've got a big chunk 379 00:19:23,920 --> 00:19:26,560 Speaker 3: of you know, one hundred dollars twelve thousand dollars a 380 00:19:26,600 --> 00:19:29,560 Speaker 3: year going into superannuation, you know that that's a really 381 00:19:29,600 --> 00:19:31,719 Speaker 3: big investment. If you consider the majority of people who 382 00:19:31,760 --> 00:19:33,960 Speaker 3: are still working have a mortgage, they might not be 383 00:19:34,040 --> 00:19:38,119 Speaker 3: able to put in additional money into SUPER. So with 384 00:19:38,200 --> 00:19:40,399 Speaker 3: that in mind, paying off your mortgage makes sense. But 385 00:19:40,440 --> 00:19:43,600 Speaker 3: then at least make sure your supers invested, you know, 386 00:19:43,640 --> 00:19:45,720 Speaker 3: with a risk profile that you can understand. 387 00:19:46,320 --> 00:19:47,520 Speaker 2: You know, we don't want to have a. 388 00:19:47,520 --> 00:19:49,679 Speaker 3: Whole heap of clients sit in their money, you know, 389 00:19:49,760 --> 00:19:51,639 Speaker 3: in cash and fixed interest and they got you know, 390 00:19:51,680 --> 00:19:54,040 Speaker 3: ten to fifteen years left of that. 391 00:19:54,040 --> 00:19:56,640 Speaker 2: That's just missing out on compound interest. 392 00:19:56,920 --> 00:20:00,280 Speaker 3: So hopefully with more money going into SUPER, people start 393 00:20:00,359 --> 00:20:02,359 Speaker 3: taking it you know a little bit more serious as 394 00:20:02,359 --> 00:20:05,360 Speaker 3: it easiest set outside of the value of your home too. 395 00:20:05,480 --> 00:20:07,879 Speaker 1: Absolutely, and even if you're in big SUPER, just be 396 00:20:08,000 --> 00:20:11,480 Speaker 1: very careful on which boxy tick in terms of balanced 397 00:20:11,560 --> 00:20:14,560 Speaker 1: or conservative or growth and what does that mean and 398 00:20:15,200 --> 00:20:18,520 Speaker 1: is it still relevant now? And broadly, as we've had 399 00:20:18,520 --> 00:20:21,000 Speaker 1: some shows on this recently, very broadly, there is a 400 00:20:21,440 --> 00:20:24,880 Speaker 1: there is new thinking which I completely support, I think, 401 00:20:24,960 --> 00:20:28,520 Speaker 1: which is we're all living longer, and the notion that 402 00:20:28,560 --> 00:20:31,439 Speaker 1: you should shift towards more conservative sort of like you 403 00:20:31,440 --> 00:20:35,439 Speaker 1: know in middle age is not really appropriate anymore because 404 00:20:35,480 --> 00:20:37,760 Speaker 1: middle age used to be forty and now it might 405 00:20:37,800 --> 00:20:40,240 Speaker 1: be sixty. If you're going to live to ninety. Okay, 406 00:20:40,320 --> 00:20:43,520 Speaker 1: just put that on the table. Ah yeah, I'm thinking Actually, 407 00:20:43,960 --> 00:20:46,800 Speaker 1: just Hugh, I think that the thirty thousand we've been 408 00:20:46,840 --> 00:20:48,480 Speaker 1: talking about all the time, the amount you can put 409 00:20:48,520 --> 00:20:52,840 Speaker 1: in pre tax each year to SUPER, that is salary 410 00:20:52,880 --> 00:20:55,400 Speaker 1: sacrifice into Super. That is the amount you can put 411 00:20:55,400 --> 00:20:59,439 Speaker 1: in minus your SGC thirty thousand. I think that's going 412 00:20:59,480 --> 00:21:03,479 Speaker 1: to go up on July one, or certainly that that's 413 00:21:03,520 --> 00:21:07,040 Speaker 1: that's that's that's the consensus. What do you know and 414 00:21:07,160 --> 00:21:08,120 Speaker 1: what might move up to. 415 00:21:09,720 --> 00:21:11,440 Speaker 3: It's going to go up to thirty two and a 416 00:21:11,480 --> 00:21:15,000 Speaker 3: half thousand dollars from July one, and that means that 417 00:21:15,119 --> 00:21:18,680 Speaker 3: the non concessional cap will go up four times at amount, 418 00:21:18,680 --> 00:21:20,679 Speaker 3: So that'll go up to one hundred and thirty thousand dollars. 419 00:21:20,800 --> 00:21:23,600 Speaker 1: Okay, what's knowing, folks, So from July one you can 420 00:21:23,640 --> 00:21:26,159 Speaker 1: put thirty two and a half thousand into super pre 421 00:21:26,280 --> 00:21:29,120 Speaker 1: tax and what was the number for post sax. 422 00:21:29,480 --> 00:21:31,440 Speaker 2: Q one hundred and thirty thousand dollars one. 423 00:21:31,359 --> 00:21:34,200 Speaker 1: Hundred and thirty thousand dollars been four times. That's the ratio. 424 00:21:34,240 --> 00:21:36,040 Speaker 1: That's how it works. Okay, we'll take a break. We'll 425 00:21:36,080 --> 00:21:48,000 Speaker 1: be back in a moment with some really good questions. Hello, 426 00:21:48,080 --> 00:21:51,679 Speaker 1: Welcome back to The Australian's Money Positive podcast. I'm James Kirby. 427 00:21:51,720 --> 00:21:55,200 Speaker 1: Welcome aboard everybody. Now, I have a lot of questions. 428 00:21:55,280 --> 00:21:57,320 Speaker 1: I had a couple on inheritance which I sort of 429 00:21:57,320 --> 00:21:59,840 Speaker 1: bundled in and didn't read out there, but I covered 430 00:21:59,880 --> 00:22:03,680 Speaker 1: them my hope in the first segment of what exactly 431 00:22:03,760 --> 00:22:05,280 Speaker 1: is going on? So let's have a look at some 432 00:22:05,440 --> 00:22:08,600 Speaker 1: questions that have come in. Or Hugh, who is one 433 00:22:08,640 --> 00:22:10,240 Speaker 1: of the sort of people I want on the show 434 00:22:10,240 --> 00:22:12,879 Speaker 1: to be able to answer this broad range that we 435 00:22:12,960 --> 00:22:15,680 Speaker 1: get all right, Danielle with the I E. 436 00:22:15,800 --> 00:22:16,119 Speaker 2: L E. 437 00:22:16,359 --> 00:22:20,840 Speaker 1: Danielle, I've a question in relation to the medical levy surcharge. 438 00:22:20,880 --> 00:22:24,919 Speaker 1: I completed my tax return and got stung. I've always 439 00:22:24,960 --> 00:22:28,360 Speaker 1: had private health insurance, but was not aware that if 440 00:22:28,359 --> 00:22:32,400 Speaker 1: the kids are not covered, I am liable. This looked 441 00:22:32,440 --> 00:22:35,400 Speaker 1: initially crazy to me. I never heard anything about it. 442 00:22:36,400 --> 00:22:37,840 Speaker 1: I'm writing to you as it would be good to 443 00:22:37,840 --> 00:22:41,720 Speaker 1: share with the money pozzle community and have a brief 444 00:22:42,040 --> 00:22:45,199 Speaker 1: explanation for a couple expecting a kid. In relation to this, 445 00:22:45,720 --> 00:22:47,720 Speaker 1: I'm paying four and a half thousand for not having 446 00:22:48,040 --> 00:22:51,639 Speaker 1: our kids covered. Makes me crazy. The tax office pretty 447 00:22:51,680 --> 00:22:54,920 Speaker 1: much considered us as a family and even if one 448 00:22:54,960 --> 00:22:58,159 Speaker 1: person is not covered, then all are liable for the 449 00:22:58,240 --> 00:23:04,760 Speaker 1: medical level levy search charge. Seriously, guys, says Danielle. Okay, 450 00:23:05,000 --> 00:23:07,159 Speaker 1: and of course we won't go into this, but private 451 00:23:07,160 --> 00:23:09,920 Speaker 1: health insurance has just popped up by four percent, being 452 00:23:09,960 --> 00:23:12,439 Speaker 1: its biggest rise in years. Did you look at that 453 00:23:12,480 --> 00:23:15,200 Speaker 1: one human? Can you tell us? Can you enlighten Danielle 454 00:23:15,359 --> 00:23:17,720 Speaker 1: Information only, folks, not advice as always. 455 00:23:18,880 --> 00:23:21,800 Speaker 3: Yeah, it was a little bit of a surprise because 456 00:23:21,800 --> 00:23:24,080 Speaker 3: most people kind of assume that you know, it would 457 00:23:24,119 --> 00:23:26,000 Speaker 3: only be maybe adults for. 458 00:23:26,000 --> 00:23:28,840 Speaker 2: The search charge, but not a child. 459 00:23:29,040 --> 00:23:31,320 Speaker 3: A child counts, so you've got they've got to be 460 00:23:31,320 --> 00:23:33,000 Speaker 3: covered by the private health as well. 461 00:23:34,320 --> 00:23:35,600 Speaker 1: You had to be done. What I'm gonna say it 462 00:23:35,600 --> 00:23:39,160 Speaker 1: is well, normally across the entire system where people have, 463 00:23:39,320 --> 00:23:42,280 Speaker 1: you know, larger families tend to be catered for in 464 00:23:42,280 --> 00:23:45,440 Speaker 1: some fashion or discounted or whatever, there is some sort 465 00:23:45,440 --> 00:23:49,080 Speaker 1: of consideration meant for them, none whatsoever. Obviously in medicaire 466 00:23:49,119 --> 00:23:52,920 Speaker 1: that wouldn't help the population to grow if you're listening ato. 467 00:23:54,720 --> 00:23:57,080 Speaker 3: Yeah, and that's how I went on the ATR website, 468 00:23:57,119 --> 00:24:00,440 Speaker 3: just because I thought that it seems on and it's 469 00:24:00,440 --> 00:24:03,000 Speaker 3: pretty clear when you know, any member of the family 470 00:24:03,040 --> 00:24:06,119 Speaker 3: did not have the appropriate level of private patients. 471 00:24:06,960 --> 00:24:08,359 Speaker 1: I wonder when do they apply it? Like if a 472 00:24:08,440 --> 00:24:10,439 Speaker 1: baby is born to they fucking in straight away? Do 473 00:24:10,520 --> 00:24:12,359 Speaker 1: you register with the How does it all work? 474 00:24:13,920 --> 00:24:17,680 Speaker 3: Yeah, well you're adding the as soon as you can. 475 00:24:17,680 --> 00:24:19,919 Speaker 3: You're adding your child to your policy. 476 00:24:20,760 --> 00:24:23,320 Speaker 1: Danielle, you have you have really found something that we 477 00:24:23,440 --> 00:24:26,640 Speaker 1: never knew, either of us or I'm sure the vast 478 00:24:26,640 --> 00:24:27,200 Speaker 1: majority of this. 479 00:24:27,320 --> 00:24:29,399 Speaker 2: That's very good, very good to tell everyone, Danielle. 480 00:24:29,440 --> 00:24:32,480 Speaker 1: Thank you, Danielle A correspondence of the week. All right, 481 00:24:32,760 --> 00:24:37,159 Speaker 1: Carol c r h L. How much extra effort is 482 00:24:37,200 --> 00:24:41,320 Speaker 1: involved in tax reporting if you have foreign shares compared 483 00:24:41,359 --> 00:24:44,520 Speaker 1: to the streamline process of holding internationally tfs. 484 00:24:46,680 --> 00:24:49,800 Speaker 4: Typically we're filling in that w you know, w BEN 485 00:24:50,520 --> 00:24:57,680 Speaker 4: W BEN form all right, you know, and it's it's honestly, 486 00:24:57,720 --> 00:24:59,800 Speaker 4: there's not a lot of information you know that the 487 00:25:00,200 --> 00:25:01,760 Speaker 4: to go into that, but you do need to complete 488 00:25:01,800 --> 00:25:04,679 Speaker 4: that form and then you know, provide the information to 489 00:25:04,720 --> 00:25:05,680 Speaker 4: your account. 490 00:25:05,440 --> 00:25:07,280 Speaker 2: I don't I don't say that as. 491 00:25:07,280 --> 00:25:10,760 Speaker 1: But but I would say to Carol, if the ETF 492 00:25:10,840 --> 00:25:13,480 Speaker 1: is local and the share is local, there's no form. 493 00:25:13,760 --> 00:25:17,359 Speaker 1: And if the if the share is overseas, or you 494 00:25:17,400 --> 00:25:21,000 Speaker 1: are buying ETFs that are overseas and people will because 495 00:25:21,040 --> 00:25:22,800 Speaker 1: they may not be available here, then you have to 496 00:25:22,800 --> 00:25:25,719 Speaker 1: do the form. Would that be basically how it works? Yeah, okay, 497 00:25:26,000 --> 00:25:29,680 Speaker 1: W B E N form which which is a simple form, 498 00:25:29,760 --> 00:25:33,160 Speaker 1: but an irritation even though the online brokes will swear 499 00:25:33,160 --> 00:25:35,080 Speaker 1: blow in the face and it's no trouble, but it 500 00:25:35,200 --> 00:25:39,920 Speaker 1: is okay number two from Carl, and thank you Carl. Folks. 501 00:25:39,960 --> 00:25:41,879 Speaker 1: You know we're going to take the trouble of sending 502 00:25:41,880 --> 00:25:44,000 Speaker 1: in a question send in a couple. People are doing 503 00:25:44,000 --> 00:25:46,520 Speaker 1: it more and more and it's great, okay, and. 504 00:25:46,480 --> 00:25:49,400 Speaker 3: I suppose James two, we are actually seeing clients by 505 00:25:50,080 --> 00:25:52,199 Speaker 3: direct shares overseas more and more, you know, when they 506 00:25:52,200 --> 00:25:55,080 Speaker 3: want that tech exposure and they might not want you know, 507 00:25:55,160 --> 00:25:59,119 Speaker 3: they've kind of maybe advanced more from just the atfs 508 00:25:59,680 --> 00:26:01,960 Speaker 3: and they don't want that whole basket anymore. They want 509 00:26:01,960 --> 00:26:05,080 Speaker 3: that direct exposure to whether it be Apple, you know, Navidia. 510 00:26:05,480 --> 00:26:07,560 Speaker 3: So I think it's a very you know, a common 511 00:26:07,560 --> 00:26:10,160 Speaker 3: thing that people looking at, especially with the low brokerage 512 00:26:10,160 --> 00:26:11,439 Speaker 3: trading accounts nowadays, and. 513 00:26:11,480 --> 00:26:13,720 Speaker 1: What about ETFs. Do you find people are saying, I 514 00:26:13,760 --> 00:26:15,640 Speaker 1: want the CDF it's not on the AX, I want 515 00:26:15,640 --> 00:26:18,160 Speaker 1: this one on In the US. 516 00:26:18,200 --> 00:26:23,719 Speaker 3: Increasingly, it's starting to increase, especially with you know, really 517 00:26:23,840 --> 00:26:26,960 Speaker 3: people adopting this AI thematic. 518 00:26:26,520 --> 00:26:27,720 Speaker 2: In their investment strategy. 519 00:26:28,200 --> 00:26:31,159 Speaker 3: They're really starting to look and the investment world is 520 00:26:31,200 --> 00:26:34,760 Speaker 3: just getting more and more global, which there's an element 521 00:26:34,800 --> 00:26:36,560 Speaker 3: that makes sense. Australia is what two two and a 522 00:26:36,600 --> 00:26:39,159 Speaker 3: half percent of the world market. You know, you're going 523 00:26:39,200 --> 00:26:41,360 Speaker 3: to get banks and resources when you buy Australia. 524 00:26:41,400 --> 00:26:43,359 Speaker 1: But also I find, you know, thetfs, you find the 525 00:26:43,359 --> 00:26:45,479 Speaker 1: ETFs are created in the US, someone comes up with them, 526 00:26:45,480 --> 00:26:48,160 Speaker 1: and like a two or three years later it arives here. 527 00:26:49,320 --> 00:26:51,400 Speaker 1: And to some extent I will say, you know it's 528 00:26:51,400 --> 00:26:53,560 Speaker 1: too late, but you might want it and you might 529 00:26:53,680 --> 00:26:56,640 Speaker 1: be prepared to wit until someone looks sort of comes 530 00:26:56,640 --> 00:26:57,320 Speaker 1: out with a copy. 531 00:26:57,640 --> 00:26:59,679 Speaker 3: And I think all the clients now have to factor 532 00:26:59,680 --> 00:27:02,080 Speaker 3: in as well, Like if you buy US shared. You 533 00:27:02,119 --> 00:27:05,439 Speaker 3: know that that's something that we haven't talked about a 534 00:27:05,440 --> 00:27:08,080 Speaker 3: lot lately, but it's. 535 00:27:07,240 --> 00:27:08,919 Speaker 2: Definitely in the conversation now. 536 00:27:08,920 --> 00:27:11,080 Speaker 3: When you're looking at the unhedged verse hedge returns over 537 00:27:11,119 --> 00:27:12,280 Speaker 3: the past twelve months. 538 00:27:12,000 --> 00:27:13,960 Speaker 1: Can I ask you one thing. I know the hedge 539 00:27:13,960 --> 00:27:17,600 Speaker 1: returns are so much better than the unhedged ones, and 540 00:27:17,640 --> 00:27:19,159 Speaker 1: it breaks your heart. And you thought you were going 541 00:27:19,160 --> 00:27:21,159 Speaker 1: to get twenty percent on your US shares and you 542 00:27:21,200 --> 00:27:24,280 Speaker 1: get eat or whatever. But aren't you kind of chasing 543 00:27:24,280 --> 00:27:27,280 Speaker 1: your tail if you buy the hedge DTF and then 544 00:27:27,320 --> 00:27:30,399 Speaker 1: four years later you forgot that it was hedged and 545 00:27:30,600 --> 00:27:32,359 Speaker 1: it was better to be on hedged. I mean, it 546 00:27:32,400 --> 00:27:34,680 Speaker 1: wouldn't it be better to just stick with the policy. 547 00:27:34,920 --> 00:27:38,000 Speaker 1: And forever I've always been hedged or always been not. 548 00:27:38,040 --> 00:27:39,600 Speaker 2: Edged great question. 549 00:27:39,760 --> 00:27:42,640 Speaker 3: Yes, over time, it all ends to it all endsed 550 00:27:42,680 --> 00:27:46,840 Speaker 3: about the same destination, you know, and that's you know, 551 00:27:46,880 --> 00:27:48,879 Speaker 3: we I suppose it's our standard policy. 552 00:27:48,920 --> 00:27:50,920 Speaker 2: We're typically two thirds. 553 00:27:50,640 --> 00:27:53,960 Speaker 3: Unhedged, one third hedged in ours, but on your fixed 554 00:27:54,000 --> 00:27:56,119 Speaker 3: income you probably always want to be hedged on that. 555 00:27:56,240 --> 00:27:57,840 Speaker 1: Yeah, yeah, different stories, Yes. 556 00:27:57,960 --> 00:28:00,560 Speaker 3: The currency impact there, candess smit your. 557 00:28:00,440 --> 00:28:03,280 Speaker 1: Return yeah yeah, okay, interesting, I must come back to that. 558 00:28:03,320 --> 00:28:05,960 Speaker 1: We will come back to that on another show. Okay. 559 00:28:06,119 --> 00:28:08,640 Speaker 1: And just finally from Karl her second question, are there 560 00:28:08,680 --> 00:28:12,479 Speaker 1: significant tax reporting differences for an Australian investor between owning 561 00:28:12,640 --> 00:28:18,920 Speaker 1: individual European stocks versus individual US stocks? Ah, I don't 562 00:28:18,920 --> 00:28:19,760 Speaker 1: know what the answer is. 563 00:28:21,359 --> 00:28:25,600 Speaker 3: Would depend on country by country, Okay, in your and whatever. 564 00:28:25,800 --> 00:28:29,600 Speaker 2: If there's tax treaties right with Australia. 565 00:28:29,200 --> 00:28:31,240 Speaker 1: So European stocks could be a bit tricky, and that 566 00:28:31,280 --> 00:28:34,120 Speaker 1: you could have a different rule for Germany or or 567 00:28:34,560 --> 00:28:37,840 Speaker 1: the UK, which of course is no longer the you 568 00:28:37,960 --> 00:28:40,480 Speaker 1: which I bet didn't help them in terms of people 569 00:28:40,520 --> 00:28:43,280 Speaker 1: buying UK stocks which have been doing very well. 570 00:28:43,600 --> 00:28:46,080 Speaker 2: Yeah, which have been Yeah, that's a contrarian trade. 571 00:28:46,120 --> 00:28:48,440 Speaker 1: That's a contrarian trade. But there you are. They have 572 00:28:48,880 --> 00:28:51,200 Speaker 1: all right, great to have you on the show again. 573 00:28:51,440 --> 00:28:53,920 Speaker 1: Hugh Robertson, regular on the show. Thanks for talking to 574 00:28:54,000 --> 00:28:54,479 Speaker 1: us today. 575 00:28:54,920 --> 00:28:56,280 Speaker 2: Thank you very much for having me. 576 00:28:56,800 --> 00:28:58,800 Speaker 1: You're welcome you. The Money Puzzle is presented by me 577 00:28:58,920 --> 00:29:03,160 Speaker 1: James Kirby and it is produced by Leah Sammerglue. Let's 578 00:29:03,200 --> 00:29:06,640 Speaker 1: have some more of those very interesting pieces of correspondence, 579 00:29:06,680 --> 00:29:09,840 Speaker 1: including if you've spot something that most people don't know, well, 580 00:29:09,880 --> 00:29:12,719 Speaker 1: we're really interested to find out, like Danielle did today 581 00:29:12,960 --> 00:29:15,920 Speaker 1: The Money Puzzle at the Australian dot com dot au. 582 00:29:16,080 --> 00:29:16,760 Speaker 1: Talk to you soon.