WEBVTT - Will the economic summit trigger wealth tax changes? 0:00:10.960 --> 0:00:14.040 Hello, and welcome to The Australian's Money Puzzle podcast. I'm 0:00:14.120 --> 0:00:17.520 James Kirby. Welcome aboard everybody. It's been a long time 0:00:17.560 --> 0:00:21.480 since any government moved to change wealth taxes, but this 0:00:21.520 --> 0:00:25.000 week at the Economic Summit in Canberra, I think we 0:00:25.079 --> 0:00:30.120 may be looking at a serious redrafting of investment rules 0:00:30.200 --> 0:00:32.600 as we know them. We've got a lot to talk about. 0:00:32.920 --> 0:00:36.080 My guest today is Will Hamilton of Hamilton Wealth Partners. 0:00:36.120 --> 0:00:37.959 How are you well, very well, Thank you very much 0:00:37.960 --> 0:00:38.400 for having me. 0:00:38.960 --> 0:00:41.080 It's good to have you on. You know, I had 0:00:41.080 --> 0:00:43.040 an idea to put you on because I know that 0:00:43.080 --> 0:00:47.000 you're very politically alert as well as being a financial advisor, 0:00:47.360 --> 0:00:49.320 and you will be across what's happening at the summit. 0:00:49.360 --> 0:00:52.519 But to my surprise, but it's also a very interesting signal. 0:00:52.600 --> 0:00:56.320 I think just this week, in the middle of the summit, 0:00:56.520 --> 0:00:59.920 barely receiving any wide attention, of course, the government did 0:01:00.120 --> 0:01:04.040 something very interesting. They lifted the deeming rates. The deeming 0:01:04.080 --> 0:01:06.320 rates are the rates, of course, at which the government 0:01:06.360 --> 0:01:09.560 deems you are making on your investments in the control 0:01:09.680 --> 0:01:13.800 pension access, and by lifting the deeming rates, they tighten 0:01:14.080 --> 0:01:17.280 pension access. It's a move I see, and I've actually 0:01:17.319 --> 0:01:20.520 sort of mentioned many times I thought it was coming 0:01:20.560 --> 0:01:23.639 because it hasn't been changed since twenty twenty one. Scott 0:01:23.680 --> 0:01:25.600 Morrison was in power when it was in and I 0:01:25.600 --> 0:01:28.480 think it is one of the first steps if you like, 0:01:28.760 --> 0:01:31.839 that this government is taking to tighten up both wealth 0:01:31.920 --> 0:01:35.560 taxes and pension access, which are very much actually more 0:01:35.640 --> 0:01:38.319 or less the same thing because they all basically work 0:01:38.360 --> 0:01:42.200 out as wealth tax you've been watching the summit, tell 0:01:42.240 --> 0:01:45.400 me what in terms of the risk that there will 0:01:45.440 --> 0:01:48.960 be more taxes, wealth taxes in particular coming down the line, 0:01:49.160 --> 0:01:50.520 where are you coming from? What do you think? 0:01:51.760 --> 0:01:53.560 Well, I've been saying for a little while that I 0:01:53.600 --> 0:01:57.280 don't think it'll be increases in taxes, but it will 0:01:57.320 --> 0:01:59.520 be decreases in. 0:02:00.160 --> 0:02:01.600 Tax breaks, so to speak. 0:02:01.680 --> 0:02:05.920 So cutting the CGT discount from fifty percent to twenty 0:02:05.960 --> 0:02:09.720 five percent, you know, playing potentially with negative gearing. So 0:02:09.760 --> 0:02:13.200 it's those things where people get a break, and it's 0:02:13.840 --> 0:02:16.079 even when you look at the performance tests where they've 0:02:16.120 --> 0:02:19.120 been playing with that. I've read a book called Abundance, 0:02:19.160 --> 0:02:24.160 which is Jim Charmer's favorite book. Now I read it 0:02:24.360 --> 0:02:27.200 so I can understand where the government's coming from on things. 0:02:27.360 --> 0:02:29.280 It's actually a really good book and it's a very 0:02:29.280 --> 0:02:33.560 interesting reading. And the thing is with these concessions, it's 0:02:33.600 --> 0:02:37.040 the top taxpayers that naturally benefit from this, the lower 0:02:37.080 --> 0:02:39.160 taxpayers don't, So this is where they're coming from this 0:02:39.240 --> 0:02:42.320 and also with the performance test, it's about providing supply 0:02:42.600 --> 0:02:45.920 because of the doubling of the price of the income 0:02:45.960 --> 0:02:49.320 required to buy house and over the last twenty years. 0:02:49.520 --> 0:02:52.040 So you see them coming in with a we're changing 0:02:52.080 --> 0:02:56.760 the terms and tightening the terms rather than headline grabbing, 0:02:57.160 --> 0:03:01.000 you know, brutal straight up web taxes. So interesting, isn't 0:03:01.000 --> 0:03:03.160 it that the deeming race, as I say, hasn't changed 0:03:03.160 --> 0:03:06.640 since Scott Morrison was in power the budget, which was 0:03:06.680 --> 0:03:10.359 the obvious opportunity to do so. Amanda Rishworth, who was 0:03:10.400 --> 0:03:13.240 the minister at the time, said no, we're not changing 0:03:13.280 --> 0:03:16.280 the deeming rate. But this week, this week when they're 0:03:16.280 --> 0:03:19.240 having a summit discussing these sort of things and this 0:03:19.280 --> 0:03:22.120 is on the agenda, they move for the first time 0:03:22.560 --> 0:03:24.560 in over four and a half years on deeming and 0:03:24.560 --> 0:03:26.760 they make it a bit tighter. Is that something of 0:03:26.919 --> 0:03:28.320 a sign of things to come? 0:03:29.760 --> 0:03:30.000 Yes? 0:03:30.280 --> 0:03:33.760 And I think that they're aware also you know, it's 0:03:33.800 --> 0:03:36.640 projected that we're going to get to twenty seven expenditure, 0:03:36.680 --> 0:03:39.040 getting to twenty seven cent of JEDDP, which you know, 0:03:39.080 --> 0:03:41.720 people like Costello I think from memory it was twenty 0:03:41.760 --> 0:03:43.560 two percent. He wouldn't allowed to go above that, say 0:03:43.640 --> 0:03:47.360 in our full five percentage points above that. And I 0:03:47.400 --> 0:03:50.680 know that's projected, it's not where it is. But they've 0:03:50.720 --> 0:03:54.040 got to catail expenditure and the people have got used 0:03:54.080 --> 0:03:57.080 to this middle class welfare so to speak as they 0:03:57.080 --> 0:04:01.000 call it that's come out, especially since COVID and even 0:04:01.080 --> 0:04:03.480 needing to tell that, so that they're going to start 0:04:03.520 --> 0:04:06.520 to do that. And this is the first sign because 0:04:06.600 --> 0:04:08.720 it's two sides of the equation. There's one is revenue 0:04:09.520 --> 0:04:12.560 and the other is expenditure. And I think Governor Low 0:04:12.840 --> 0:04:15.400 I will form a Governor Low of the Reserve Bank, 0:04:15.720 --> 0:04:18.359 very critical as well and outspoken on the extent of 0:04:18.400 --> 0:04:21.360 expenditure of the government, you know, And it makes me 0:04:21.400 --> 0:04:23.920 realize also just some of the things. Having read Abundance, 0:04:23.960 --> 0:04:26.279 and I do recommend that people do read this. It 0:04:26.400 --> 0:04:28.520 helps you see where the government's coming from. 0:04:28.760 --> 0:04:33.040 Yes, because it's like a manifesto basically, and to some extent, 0:04:33.080 --> 0:04:36.200 every government has one, or at least many governments have one, 0:04:36.240 --> 0:04:37.800 and you get an idea of where they're coming from. 0:04:37.839 --> 0:04:40.159 That is a book across written in the US. It's 0:04:40.160 --> 0:04:41.599 a client Eklin. 0:04:41.960 --> 0:04:46.400 Yeah, ezral substitute America for Australia as you read it. 0:04:48.520 --> 0:04:52.720 Well, let's hope it don't substitute it directly. So in 0:04:52.839 --> 0:04:58.360 terms of reading Tea leaves. In terms of politically feasible moves, 0:04:58.440 --> 0:05:00.920 let's look at the two sides we talked about how 0:05:00.960 --> 0:05:03.960 they can. Basically there's the revenue and there's the expenditure. 0:05:04.400 --> 0:05:07.480 We see some things at the summit like NDIS, perhaps 0:05:07.520 --> 0:05:11.480 some structural reform to NDIS. We see the deeming rate 0:05:11.560 --> 0:05:15.039 basically being pinched. Where else do you see? What do 0:05:15.120 --> 0:05:17.560 you see coming down the line you mentioned CGT. Just 0:05:17.640 --> 0:05:19.360 what's your sense of where they'll move. 0:05:20.720 --> 0:05:22.400 Yeah, I think it's going to be on tax breaks, 0:05:22.440 --> 0:05:25.039 which is also about simplifying that the tax system, and 0:05:25.040 --> 0:05:30.400 whereas I also thought on they make grandfather assets that 0:05:30.600 --> 0:05:33.920 you're like Keating did in nineteen eighty five, boom, as 0:05:33.960 --> 0:05:37.360 of tonight, this comes in. But if you're you're prior 0:05:37.440 --> 0:05:40.359 of that your grandfather, you know, there's even talk that 0:05:40.720 --> 0:05:43.760 you'll only be grandfathered for a period like five years, 0:05:44.160 --> 0:05:46.440 So that that's a lot harsher than I thought. 0:05:46.600 --> 0:05:48.920 For instance, explain what you mean there will that said, 0:05:49.080 --> 0:05:52.080 not everyone would understand where you're coming from there about grandfathering. 0:05:52.440 --> 0:05:55.000 So if you have an asset, yeah, so on on 0:05:55.120 --> 0:05:59.080 things like SAG on CGT, they're talk Yeah. For instance, 0:05:59.120 --> 0:06:02.640 they're talking about and fathering assets that you already hold. 0:06:03.279 --> 0:06:03.479 Yeah. 0:06:03.480 --> 0:06:06.840 The discussion that I've heard is, you know, you'll only 0:06:06.839 --> 0:06:09.480 have a five year break on that, not as in 0:06:09.600 --> 0:06:12.440 tonight at the new rate of a twenty five percent 0:06:12.480 --> 0:06:15.040 discount comes in on assets that you purchase from tomorrow 0:06:15.760 --> 0:06:17.320 and the assets that you hold today are at a 0:06:17.320 --> 0:06:20.360 fifty percent discount. They'll only that that grandfathering will only 0:06:20.440 --> 0:06:24.000 last for a number of years. Now, that's also telling 0:06:24.040 --> 0:06:26.200 you they want that that's a chase for revenue. 0:06:26.520 --> 0:06:30.080 Yes, okay, So just to bring listeners into the picture here, 0:06:30.160 --> 0:06:34.599 just in case. The perhaps I suppose the outstanding piece 0:06:34.680 --> 0:06:37.200 of speculation as to what they might do, almost as 0:06:37.200 --> 0:06:41.000 a process of elimination, is that at the moment there's 0:06:41.040 --> 0:06:44.160 the CGT discount, if you have an asset of any description, 0:06:44.440 --> 0:06:46.640 if you hold it for more than a year, then 0:06:46.839 --> 0:06:49.840 the tax that's applicable only it is reduced by fifty percent. 0:06:50.480 --> 0:06:54.000 And the rumor basically is that they'll turn that down 0:06:54.040 --> 0:06:57.680 to twenty five percent. And you're explaining that also, they'll 0:06:57.680 --> 0:06:59.560 only have a limited number of time by which you 0:06:59.640 --> 0:07:02.200 have to by which you can sell the asset and 0:07:02.240 --> 0:07:04.760 not get it with that tax, because that's called grand furthering, 0:07:04.760 --> 0:07:06.360 and they have this sort of safety period. Isn't five 0:07:06.400 --> 0:07:09.480 years enough? Most people get their backt together in five years. 0:07:10.280 --> 0:07:12.920 Oh yes, it's enough. But I think that what I've 0:07:13.640 --> 0:07:15.600 was envisaged in as I said they would do like that. 0:07:15.840 --> 0:07:18.000 It was done in September eighty five with Katine when 0:07:18.040 --> 0:07:21.080 he sort of brought in SGT an asset SGT free 0:07:21.120 --> 0:07:25.240 an acid. Yeah, is now accessible, but no that's not 0:07:25.360 --> 0:07:28.200 the case. So that mains their main business. 0:07:28.240 --> 0:07:31.920 Yeah, yes, I think it's I mean, tell me what 0:07:31.960 --> 0:07:35.360 you think. But it's also interesting if you think about 0:07:35.360 --> 0:07:39.840 what really matters for investors at this summit, and it's 0:07:40.240 --> 0:07:41.920 nothing short of entertaining to look at some of the 0:07:41.920 --> 0:07:44.880 submissions and everything's on the table. I mean, death tax, 0:07:45.080 --> 0:07:49.480 inheritance tax, well tax of European style. I think they 0:07:49.480 --> 0:07:52.280 should all be should be aware that they're all on 0:07:52.320 --> 0:07:55.440 the table and that they are being bounced around basically 0:07:55.480 --> 0:07:58.840 at this time. But in terms of hard data, hard 0:07:58.880 --> 0:08:02.200 facts so far are I thought the most interesting thing 0:08:02.400 --> 0:08:05.480 was that, first of all, Jim Chalmer said, hey, super 0:08:05.520 --> 0:08:08.600 tax is going through us. I've planned. Even Andrew Fraser, 0:08:09.400 --> 0:08:12.960 the former Queensland treasure close friend of the treasure who 0:08:13.000 --> 0:08:15.400 put in a late application if you like, a lead 0:08:15.440 --> 0:08:17.560 submission to the someone and said look there's another way 0:08:17.560 --> 0:08:20.600 to do this and don't do unrealized gains. He got 0:08:20.640 --> 0:08:23.000 shot down basically, and Charmer said, no, we've got our 0:08:23.040 --> 0:08:25.880 plan we're sticking with. So I think hard message from 0:08:25.920 --> 0:08:28.200 the summits is that super taxes going through us planned. 0:08:28.200 --> 0:08:31.040 What do you think too much? Do you think that's accurate? 0:08:32.360 --> 0:08:32.760 I think so. 0:08:33.040 --> 0:08:36.640 Look everything that both the Prime Minister and the Treasurer 0:08:36.640 --> 0:08:39.760 have said, they haven't buckled one little bit on this, 0:08:40.280 --> 0:08:42.520 and you know what I might think, And you have 0:08:42.679 --> 0:08:46.160 others like Andrew Fraser just mentioned on unrealized capital gains 0:08:46.200 --> 0:08:46.720 it's coming. 0:08:47.679 --> 0:08:52.360 Yeah, So that's super tax, CGT, YEP, pension access. We've 0:08:52.400 --> 0:08:55.560 got three sort of major items there. Anything else you 0:08:55.600 --> 0:08:58.000 think we should talk before the break in terms. 0:08:57.760 --> 0:09:01.400 Of potentially negative gearing, you could say restrictions on negative gearing. 0:09:02.480 --> 0:09:04.160 Shortened ran on all these things. 0:09:03.960 --> 0:09:06.680 And short And ran on them and he lost an election. 0:09:07.600 --> 0:09:08.719 Yeah, but I don't think it's going to be a 0:09:08.800 --> 0:09:10.520 dramatic you know, they allow you to have so many 0:09:10.520 --> 0:09:13.400 properties whatever. But yeah, but again, I think you'll see 0:09:13.480 --> 0:09:15.400 some tightening of those concessions. 0:09:16.320 --> 0:09:21.360 Do you think the public appetize and the context in 0:09:21.400 --> 0:09:24.040 which you could bring in those has changed? In other words, 0:09:24.040 --> 0:09:26.600 when short And tried to bring it in, everyone basically 0:09:26.679 --> 0:09:30.120 jumped up and down. Do you think it's more receptive now? 0:09:31.400 --> 0:09:31.600 Yes. 0:09:31.720 --> 0:09:34.880 I think he tried to do this in twenty nineteen 0:09:34.880 --> 0:09:37.240 from memory pre COVID. We're now post COVID, and I 0:09:37.240 --> 0:09:40.400 think everybody does realize there is an issue, and it's 0:09:40.400 --> 0:09:43.319 an issue. It's with the fact that we're overspending and 0:09:43.400 --> 0:09:45.840 we're not and read there's a shortage of revenue, so 0:09:46.760 --> 0:09:49.080 we need to look at both sides of the balance sheets, 0:09:49.080 --> 0:09:51.920 so to speak. And you know, it's interesting, this isn't 0:09:51.960 --> 0:09:55.280 just an Australian issue. You know, look what Starmer tried 0:09:55.320 --> 0:09:57.320 to do. Correct then the issue is not going to 0:09:57.360 --> 0:09:59.760 be with the people. It actually could be with his 0:09:59.760 --> 0:10:04.200 own bench like Sarma had. When you have a large majority, Yeah, 0:10:04.360 --> 0:10:08.000 sometimes people start flexing their muscles on the back bench. 0:10:08.160 --> 0:10:12.400 And like what Starma was proposing was really towards curbing 0:10:12.800 --> 0:10:16.120 I think it's called pit which is their ndis. 0:10:16.360 --> 0:10:19.040 Yeah, and he was just trying to curb the excesses 0:10:19.080 --> 0:10:19.400 in that. 0:10:19.720 --> 0:10:22.480 And they've also tried non dom taxes and they're now 0:10:22.520 --> 0:10:25.640 trying property taxes, aren't they. So it keeps coming. There 0:10:25.640 --> 0:10:29.760 are waves of basically wealth tax efforts in a corresponding 0:10:29.800 --> 0:10:32.480 economy the UK at the same time with interestingly a 0:10:32.559 --> 0:10:34.760 labor government. Okay, we'll take a short break. We'll be 0:10:34.760 --> 0:10:43.040 back in a moment. Lots to talk about. Hello, Welcome 0:10:43.040 --> 0:10:46.160 back to The Australian's Money Puzzle podcast. James Kirby here 0:10:46.320 --> 0:10:52.120 with Will Hamilton, regular guest of Hamilton Wealth Partners. I 0:10:52.200 --> 0:10:54.680 tend to get Will on when I have very tricky, 0:10:55.080 --> 0:10:58.000 urgent issues to talk about. We do the budget together 0:10:58.080 --> 0:11:01.560 each year, and obviously this we have the economic Summit 0:11:01.880 --> 0:11:06.600 just before we talk about what investors are doing ahead, 0:11:06.640 --> 0:11:09.000 if you like, of the potential changes that are coming 0:11:09.000 --> 0:11:12.120 down the line. You mentioned about housing. You mentioned the 0:11:12.160 --> 0:11:16.440 performance tests. I don't know what you think, but I 0:11:16.480 --> 0:11:19.960 thought that was a studied leak from the summit. I 0:11:19.960 --> 0:11:23.000 thought it meant very little in the overall scheme of things. 0:11:23.480 --> 0:11:25.520 The super funds will do what they want to do. 0:11:26.000 --> 0:11:29.000 That they're making some teeny weeny change to the performance 0:11:29.120 --> 0:11:32.520 tests to satisfy the super funds. Well, yeah, you know, okay, 0:11:32.520 --> 0:11:35.200 and maybe they'll build more houses. Yeah, sure, perhaps in 0:11:35.240 --> 0:11:38.400 the in the fullness of time. That's that's always a probability. 0:11:38.480 --> 0:11:44.160 But I think the performance tests are worth having, and 0:11:45.720 --> 0:11:47.960 they may not be perfect, they will never be perfect. 0:11:48.040 --> 0:11:50.760 But I don't think that I think that's almost a 0:11:50.840 --> 0:11:54.840 decoy basically, that performance test stuff. It's arcane virtually. What 0:11:54.880 --> 0:11:56.760 do you maybe, do you think it's more than that? 0:11:57.080 --> 0:11:57.520 No, I don't. 0:11:57.520 --> 0:11:59.800 I actually like the performance tests as well. But I 0:11:59.840 --> 0:12:02.560 do think this is about some attempt to try and 0:12:03.360 --> 0:12:04.760 drive supply on housing. 0:12:05.000 --> 0:12:05.240 Again. 0:12:05.320 --> 0:12:07.880 I get back to their book abundance and they've they've 0:12:07.920 --> 0:12:10.079 got to increase the supply and how do they do it? 0:12:10.720 --> 0:12:13.040 And they won't ever get into trouble by trying And 0:12:13.080 --> 0:12:15.800 they do try also, to be fair, they are trying 0:12:16.000 --> 0:12:21.000 all sorts of things from incentives programs, shared equity and 0:12:21.080 --> 0:12:23.240 now trying to get the big super funds, who will 0:12:23.280 --> 0:12:24.880 in the end only do it if they can make 0:12:24.920 --> 0:12:27.240 money out of it. And it's worth pointing out, folks 0:12:27.240 --> 0:12:30.360 that the big super funds or well into the housing market. 0:12:30.400 --> 0:12:32.520 They've build luxury apartments so you can find them all 0:12:32.559 --> 0:12:35.320 over the country, bank rolled by SeaBus, et cetera. It's 0:12:35.520 --> 0:12:38.320 just affordable housing. They don't want to do because they 0:12:38.320 --> 0:12:40.400 can't make money out of it. All right, put that 0:12:40.400 --> 0:12:43.400 to one side. Tell me what in terms of what's 0:12:43.400 --> 0:12:47.600 happened so far, super taxes for sure, changes are coming 0:12:47.640 --> 0:12:50.200 down the line. This is a second term labor government. 0:12:50.200 --> 0:12:53.640 They've got the win behind them, they've got strong ratings, 0:12:53.640 --> 0:12:57.240 they are in a position to do things. What are 0:12:57.360 --> 0:13:02.040 investors doing ahead of this? Is there moves to chake 0:13:02.080 --> 0:13:05.040 money out of super and if there is, for instance, 0:13:05.679 --> 0:13:07.760 where are people putting it? And will it just be 0:13:08.559 --> 0:13:11.000 a chase where they move to family trust and then 0:13:11.040 --> 0:13:14.000 they government move on family trust and then they chase 0:13:14.040 --> 0:13:15.040 them across somewhere else. 0:13:16.600 --> 0:13:18.320 Look, we've seen a few clients want to do this. 0:13:18.400 --> 0:13:21.120 We've said just hold off because there isn't any hurry. 0:13:21.320 --> 0:13:22.800 You still, you know, you've gotten to the end of 0:13:22.800 --> 0:13:24.839 this year and we need to see the legislation and 0:13:24.920 --> 0:13:28.080 we haven't seen the legislation yet, but you know, basically 0:13:28.120 --> 0:13:29.880 not what's coming, but we do. I think it is 0:13:29.920 --> 0:13:32.280 wise when you've got time to wait. But no, Look, 0:13:32.320 --> 0:13:34.880 there are one or two that have panicked, I think 0:13:35.040 --> 0:13:37.280 is probably the right way to put it, and they 0:13:37.280 --> 0:13:41.160 want to get things sort of pre last financial year. 0:13:42.040 --> 0:13:46.920 And yes they are moving things into one is to 0:13:46.920 --> 0:13:50.840 family trust. But will family trust get taxed? They've said 0:13:50.840 --> 0:13:54.480 no new taxes, so you know, we have to therefore 0:13:54.480 --> 0:13:56.840 rely on that that there won't be any new taxes 0:13:56.880 --> 0:13:59.839 in this term. That doesn't mean there won't be in 0:14:00.080 --> 0:14:03.240 the next term of parliament. The other thing is, you know, 0:14:03.840 --> 0:14:05.880 one or two people have sort of where they've got 0:14:05.880 --> 0:14:09.400 excess balance, have been using this to you nonconcessional contributions 0:14:09.440 --> 0:14:11.680 to children and making their members of super funds and 0:14:11.720 --> 0:14:14.400 things like that. So us send them some articles in 0:14:14.440 --> 0:14:17.200 the paper that this is a common strategy we've had. 0:14:17.440 --> 0:14:19.560 You know, we have seen some people want to do that. 0:14:19.640 --> 0:14:22.000 You know, again we caution them because you've got different 0:14:22.080 --> 0:14:24.000 risk profiles for different age groups. 0:14:24.080 --> 0:14:27.280 Just to explain to listeners, that's moving. Traditionally, super funds 0:14:27.320 --> 0:14:28.840 there was a limit on how many people could be 0:14:28.880 --> 0:14:32.640 in them, and it's now six. So people are saying, oh, 0:14:32.680 --> 0:14:34.680 there's just mom and dad so far. Let's open it up. 0:14:34.720 --> 0:14:38.160 Let's put the kids in, adult kids in redistributing inside 0:14:38.200 --> 0:14:41.560 super But you're saying that opens what cand of worms? 0:14:42.760 --> 0:14:46.120 Well, you've got to they're our members, your super fund. 0:14:46.120 --> 0:14:48.120 You've got to me as long as you're doing things 0:14:48.160 --> 0:14:52.440 I think with governance in there, and yeah, there's transparency, 0:14:52.480 --> 0:14:56.040 there's openness, and just remember, you know, make sure everybody's 0:14:56.080 --> 0:14:59.000 in the right risk profile because generally a person who's 0:14:59.080 --> 0:15:02.800 in their thirties they've got thirty ideas until they can 0:15:03.000 --> 0:15:05.200 access super and so they're going to have a different 0:15:05.280 --> 0:15:07.240 risk profile than somebody who's in their sixties. 0:15:07.680 --> 0:15:10.480 Yeah, exactly, So mom and dad are they're sort of 0:15:10.560 --> 0:15:16.520 possibly preserving to some extent, and adult children brought into 0:15:16.520 --> 0:15:18.720 the SMSF for the first time because there's a new 0:15:18.800 --> 0:15:20.960 you can now have up to six people, isn't it. 0:15:21.080 --> 0:15:24.480 In smsfs, they could be looking at extremely different where 0:15:24.480 --> 0:15:26.840 they could be looking at growth stocks, they could be 0:15:26.880 --> 0:15:30.160 looking at ethical concerns that weren't on the table perhaps 0:15:30.200 --> 0:15:33.840 twenty years ago. Is that what you're referring to. 0:15:34.160 --> 0:15:36.320 Yeah, look, there's different needs. 0:15:36.360 --> 0:15:38.360 It's just it's the same as when you get different 0:15:38.400 --> 0:15:42.000 generational changes and people looking at your paths and you're 0:15:42.720 --> 0:15:46.200 in your one age groups wanting to give to more 0:15:47.240 --> 0:15:50.960 environmental causes, whereas the older generations are wanting to give 0:15:51.040 --> 0:15:53.400 to your more health related So you've got to be 0:15:53.480 --> 0:15:57.000 aware of the generational issues you're bringing into yourself. And 0:15:57.080 --> 0:15:59.000 it's super fun when you do that. And you've got 0:15:59.000 --> 0:16:02.480 to make sure that the eypinness and transparency is there. 0:16:02.840 --> 0:16:06.840 Okay, past folks, by the way, are the philanthropic tax 0:16:07.080 --> 0:16:12.120 shelters basically public that are very good and useful but 0:16:12.200 --> 0:16:14.640 for very wealthy people. Really all right, And we have 0:16:14.800 --> 0:16:16.560 had someone on the show in the past if you 0:16:16.600 --> 0:16:17.960 want to have a look at that. One last thing 0:16:18.400 --> 0:16:21.640 will which I thought was really interesting. We've been talking 0:16:21.680 --> 0:16:24.760 on the show about the almost like something under your 0:16:24.840 --> 0:16:31.200 nose basically for people are planning around potential wealth tax changes, 0:16:31.240 --> 0:16:34.320 and that the sort of opportunity that's under everyone's nose 0:16:35.360 --> 0:16:38.840 is that it's all income is tax free up to 0:16:38.960 --> 0:16:42.440 eighteen thousand or so, and so many people don't have 0:16:42.520 --> 0:16:45.080 to have everything in super but I see some suggestions 0:16:45.120 --> 0:16:47.720 that could be closed off too to income that it 0:16:47.760 --> 0:16:49.800 could only be for Saturdy. It wasn't that interesting. 0:16:50.640 --> 0:16:53.160 That was interesting. I sort of looked at them with horror. 0:16:55.240 --> 0:16:57.400 Well, it's like on the show, we've not that we've 0:16:57.440 --> 0:16:59.360 just discovered it, but we have been talking about it, 0:16:59.400 --> 0:17:01.680 and many people have been talking about it, and then 0:17:01.720 --> 0:17:04.240 suddenly you see, oh, there's a couple of submissions saying, hey, 0:17:04.280 --> 0:17:08.200 close that off. That's a escape corridor. So that's what 0:17:08.440 --> 0:17:09.840 do you think is that realistic? 0:17:10.000 --> 0:17:11.280 I don't think that one's realistic. 0:17:11.400 --> 0:17:11.440 No. 0:17:12.520 --> 0:17:14.359 Again, I think there could be quite an outcry on 0:17:14.359 --> 0:17:14.640 that one. 0:17:14.680 --> 0:17:17.280 And I think they're going to make decisions where is 0:17:17.520 --> 0:17:18.520 less noise. 0:17:18.520 --> 0:17:20.400 Yes, because they do seem to be in the end 0:17:20.440 --> 0:17:24.120 a relative. How they move is quite conservatively. They bring 0:17:24.160 --> 0:17:26.680 it up, they put it on the table, and then 0:17:26.720 --> 0:17:28.800 they get it through. Well, if they were to be 0:17:28.840 --> 0:17:31.720 re elected again, there was their procedure. They said, well, 0:17:31.840 --> 0:17:33.600 we've put it to an election, We've been elected, so 0:17:33.640 --> 0:17:36.040 we are absolutely given to go ahead, green light to 0:17:36.080 --> 0:17:38.880 do whatever. That's how they did the super tax. Okay, 0:17:39.760 --> 0:17:41.720 well that's a pretty that was a pretty juicy in 0:17:41.840 --> 0:17:45.040 newsworthy session, folks with Will, we're going to now have 0:17:45.160 --> 0:17:48.520 some questions. Some of them are on the summit, but 0:17:48.680 --> 0:17:51.520 we've probably dealt with them. But there's some great questions 0:17:51.840 --> 0:18:09.200 which we'll deal with in a moment. Back in a moment. Hello, 0:18:09.240 --> 0:18:12.280 and welcome back to The Australian's Money Puzzle podcast. James 0:18:12.320 --> 0:18:17.200 Kirby here with Will Hamilton of Hamilton Wealth Partners. Piece 0:18:17.200 --> 0:18:21.120 of correspondence from Jeremy. Hello from Hobart. I've recently started 0:18:21.160 --> 0:18:24.600 listening to your podcast while writing my indoor trainer and 0:18:24.680 --> 0:18:27.879 I really enjoy the discussions. It makes the cold winter 0:18:28.000 --> 0:18:32.320 garage sessions much more bearable. So thank you, Thank you. 0:18:32.440 --> 0:18:35.800 Jeremy down there in cold Hobart. We're here and Sonny Melbourne, 0:18:35.800 --> 0:18:39.480 our producer Lea is in rain SAWTN, Sydney. Jeremy's just 0:18:39.520 --> 0:18:43.400 asking about the best structures and pros and cons around 0:18:44.400 --> 0:18:48.119 basically for holding family investments. It's a very dark question, Jeremy. 0:18:48.160 --> 0:18:49.439 We won't be able to get to it today, but 0:18:49.520 --> 0:18:52.040 I think it would be worth listening to what Will 0:18:52.040 --> 0:18:53.960 had just been saying at the end of the last 0:18:54.000 --> 0:18:57.560 segment around alternatives. If you like to super that being 0:18:58.600 --> 0:19:04.520 family trust, expansion, family truss, expanding the SMSF out to 0:19:04.680 --> 0:19:08.320 anything up to six people. There are starters if you like, 0:19:08.359 --> 0:19:10.440 we'd come back to that another time if we can. 0:19:10.800 --> 0:19:14.200 None of this is advice, it's information only question from Demien. 0:19:14.280 --> 0:19:17.800 There will yeah, So Damien asks, would you know what 0:19:17.840 --> 0:19:21.119 the final dividend for twenty twenty five is on my 0:19:21.440 --> 0:19:27.000 Vanguard ETF VSO's small caps is at three dollars ninety 0:19:27.040 --> 0:19:31.080 eight per share. It seems extraordinarily high for an ETF 0:19:31.119 --> 0:19:33.400 made up of some one hundred and ninety six separate companies. 0:19:33.400 --> 0:19:36.639 They have a dividend yield of seven point eight eight percent, 0:19:37.520 --> 0:19:39.800 and I can't seem to be able to track down 0:19:39.840 --> 0:19:42.679 where it has come from. So if I was you, 0:19:42.840 --> 0:19:46.320 I would have a chat with Vanguard and find there. 0:19:46.359 --> 0:19:51.919 You know, there could be as with ETFs, the rebalancing occurs, 0:19:51.960 --> 0:19:54.439 there could be some capital gains in that. But I 0:19:54.480 --> 0:19:56.640 would have a chat with them and that they will 0:19:56.680 --> 0:19:58.639 be able to give you that transfer, that that degree 0:19:58.640 --> 0:20:00.160 of transparency that you are quire. 0:20:00.760 --> 0:20:03.080 Very good and Damian, we've had questions like this before, 0:20:03.080 --> 0:20:06.040 and often sometimes the mechanics of the ETFs are not 0:20:06.760 --> 0:20:12.080 instantly obvious to the clients who buy the ETFs. You 0:20:12.119 --> 0:20:14.760 know they mirror the stock market. Yes, but not always 0:20:14.800 --> 0:20:17.240 in their dividend flows for instance. That could be due 0:20:17.440 --> 0:20:20.200 to do with the mechanics or the timing, as Will 0:20:20.320 --> 0:20:24.359 has alluded to. Now, the final question is actually this 0:20:24.440 --> 0:20:27.040 is a reprise of a question because I wanted to 0:20:27.040 --> 0:20:29.439 put it to you too, Will. We had it on 0:20:29.480 --> 0:20:31.800 the show the other day that was really interesting. So 0:20:31.920 --> 0:20:34.480 a guy called Drew. He says, I'm forty three and 0:20:34.560 --> 0:20:37.679 every year the level of my earnings means that I 0:20:37.760 --> 0:20:42.600 exceed the concession of super cap, the tax free super 0:20:42.600 --> 0:20:44.879 cap of thirty thousand dollars, and I have to pay 0:20:45.800 --> 0:20:49.120 the extra tax for high earners Division two ninety three, 0:20:49.600 --> 0:20:52.160 and in the future two ninety six is coming down 0:20:52.160 --> 0:20:55.760 the line, and he says, with limitations on super contributions 0:20:55.800 --> 0:21:00.119 and penalties, I would like to explore the idea of 0:21:00.160 --> 0:21:03.879 opting out of compulsory super contributions if your balance is 0:21:04.000 --> 0:21:06.560