WEBVTT - Finance with Blake Wendt | June 18th, 2025

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<v Speaker 1>Now on afternoon. All things financed with Blake were from

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<v Speaker 1>Pretzel Wealth.

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<v Speaker 2>Organize your free consultation at pretzelwealth dot com dot au. Yes,

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<v Speaker 2>Blake is here one three one eight seven three zero

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<v Speaker 2>four six zero eight seven three eight seven three. He'll

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<v Speaker 2>talk about anything you like relating to personal wealth finance.

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<v Speaker 1>How are you mate, good mate?

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<v Speaker 3>Good?

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<v Speaker 1>Yourself well? And a financial year you'd be pretty.

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<v Speaker 4>Busy, pretty busy just trying to get contributions into super

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<v Speaker 4>and move money's around. So it's an exciting time. It

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<v Speaker 4>certainly keeps me up at night, but it's all good fun.

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<v Speaker 2>Yes, I think with the the unexpected, it's fair to

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<v Speaker 2>say in some quarters speculation about interest rates going down,

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<v Speaker 2>we'd have a lot of self funded retirees thinking hmm,

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<v Speaker 2>do I move my money around?

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<v Speaker 4>Certainly, and you know some of the minutes that have

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<v Speaker 4>come out from the RBA that there's question marks around Okay,

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<v Speaker 4>what you know if tariffs from the US come back online,

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<v Speaker 4>what does that mean for us? And the market is

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<v Speaker 4>starting to talk about potentially a July rate cut again,

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<v Speaker 4>so it's interesting to see some of that commentary. We'll

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<v Speaker 4>no closer to the date, of course, what's happening there.

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<v Speaker 1>But this is the.

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<v Speaker 4>Theme now, bill It's interest rates are coming down. How

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<v Speaker 4>quickly well, time will tell. But as they come down,

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<v Speaker 4>that's great for mortgage holders. Not so great if you're

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<v Speaker 4>a retiree with cash sitting in the bank.

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<v Speaker 2>I've got three kids with mortgages. They know all about

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<v Speaker 2>if they're in their thirties. They're trying to pay it

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<v Speaker 2>down and doing a pretty good job. They're disciplined about it.

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<v Speaker 2>But hey, if you're a self under retiree with a

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<v Speaker 2>short term deposit, and those sort of things are important.

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<v Speaker 2>Leaving super aside for a moment, but there's all those

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<v Speaker 2>factors too.

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<v Speaker 4>Certainly, you know you're now starting to think, Okay, do

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<v Speaker 4>I leave my money in the high interest savings account?

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<v Speaker 1>Do I leave it in cash sitting there?

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<v Speaker 4>Yes, you might be getting a better interest rate than

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<v Speaker 4>locking it up for twelve months, but maybe the term

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<v Speaker 4>deposit or locking it up for a longer period of

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<v Speaker 4>times the way to go, especially if we're thinking, well,

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<v Speaker 4>there's going to be a few more rate cuts. So

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<v Speaker 4>you know, whilst the average i'd say twelve month term

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<v Speaker 4>deposits sitting at about four percent, that's lower than what

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<v Speaker 4>you can get in a high entret savings account, high

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<v Speaker 4>indret savings accounts a sort of sitting around that four

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<v Speaker 4>and a half to four point seventy five percent on average.

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<v Speaker 4>Some are giving you bonus rates in the five still,

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<v Speaker 4>but certainly this is on people's minds. They're saying, well,

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<v Speaker 4>what do we do now? And this is the conversation

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<v Speaker 4>we're having. As COVID was kicking on when they started

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<v Speaker 4>cutting rates quite aggressively, cash was effectively paying you nothing

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<v Speaker 4>back then, and so alternatives had to be considered. Push

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<v Speaker 4>people into the stock market, had to get money's invested.

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<v Speaker 4>And I think that's where it's going to go again.

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<v Speaker 1>And if so, for how long?

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<v Speaker 2>That's the other thing pretend to be quest that's a

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<v Speaker 2>piece of string question obviously when it comes to the economy.

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<v Speaker 2>It's twenty to two calls, some text coming in already, mate,

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<v Speaker 2>which is great. Thank you for not leaving it to

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<v Speaker 2>the last minute, because we can't accommodate you if you

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<v Speaker 2>do so, we really appreciate it. Brian, well done, you're

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<v Speaker 2>first in the queue. How can Blake help?

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<v Speaker 5>Yes, good afternoon. Every year I put the maximum amount

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<v Speaker 5>of concessional contribution into my super whereby the super my

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<v Speaker 5>superpund takes out fifteen percent of that and gives it

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<v Speaker 5>to the government as tax at the time of my death.

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<v Speaker 5>If it's the person who gets my inheritance from my

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<v Speaker 5>super is not my spouse, it is my children, they

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<v Speaker 5>are potentially able to be charged by the government fifteen

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<v Speaker 5>to seventeen percent tax on that inheritance. What I want

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<v Speaker 5>to know is, therefore I have what they call a

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<v Speaker 5>taxable component in my superannuation fund, in my accumulation fund.

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<v Speaker 5>How why do I have to pay additional Will my

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<v Speaker 5>children need to pay additional tax on that? Why is

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<v Speaker 5>it called a taxable component? And how can I not

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<v Speaker 5>be in that position?

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<v Speaker 4>Okay, So this all comes back to how super was

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<v Speaker 4>created and the treatment of tax under certain circumstances.

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<v Speaker 1>So you're quite right.

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<v Speaker 4>If you pass away and your super goes to your spouse,

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<v Speaker 4>no tax on that on that amount. But if it

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<v Speaker 4>goes to adult children, your taxable component will be taxed

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<v Speaker 4>fifteen percent if it goes to them via the will

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<v Speaker 4>or the estate. If you transfer the or the superinnuation

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<v Speaker 4>ends up going to the children directly, So you nominate

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<v Speaker 4>the children as beneficiaries on your superfund. Then there is

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<v Speaker 4>a fifteen percent rate of tax plus medicare because obviously

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<v Speaker 4>medicare is important, so they slap on a two.

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<v Speaker 1>Percent medicare charge on that. Getting around that, there's two ways.

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<v Speaker 4>One is, if you're young enough, so under the age

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<v Speaker 4>of seventy five, you could consider a recontribution strategy, also

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<v Speaker 4>subject to I suppose you're toe superbalance. If you're less

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<v Speaker 4>than one point nine million dollars at the moment, you

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<v Speaker 4>can do these recontribution strategies. Moneys would come out of Super.

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<v Speaker 4>Monies would then go back into Super subject to contribution limits,

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<v Speaker 4>so you can effectively get in one hundred and twenty

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<v Speaker 4>thousand or three hundred and sixty thousand back into Super.

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<v Speaker 4>So essentially money's out, money's in. If you're mindful that

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<v Speaker 4>maybe there's not so much time left, you could withdraw

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<v Speaker 4>Super in its entirety. So if you can pull the

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<v Speaker 4>total balance out of Super, then that will negate any

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<v Speaker 4>death taxes applicable to superannuation.

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<v Speaker 1>So two options.

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<v Speaker 4>The second option really is a bit tricky because we

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<v Speaker 4>don't know what time we've got left, and it's very

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<v Speaker 4>difficult to sort of try to pinpoint that. So option

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<v Speaker 4>one's the preferred option. Get some advice around this. Moneys

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<v Speaker 4>need to leave super go back in, and when they

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<v Speaker 4>go back in, it enters the tax free component. And

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<v Speaker 4>when you pass away, it doesn't matter who gets the

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<v Speaker 4>super If a component of that superinnuation is tax free,

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<v Speaker 4>there's no tax applicable to that.

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<v Speaker 1>So, yeah, you quite make it. Make a good point Bright.

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<v Speaker 4>Not too many people are aware of this death tax

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<v Speaker 4>that sits there in super. Fifteen percent tax has been

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<v Speaker 4>paid in. It's in a concessional environment. You're able to

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<v Speaker 4>start income streams later on in life through retirement and

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<v Speaker 4>enjoy the benefits of potentially having it all tax free.

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<v Speaker 4>But the government certainly wants to take their share at the.

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<v Speaker 5>End with my superfund handle that reconstitute reconstitution amount? Would

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<v Speaker 5>they do that or would I have to pay a

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<v Speaker 5>financial advisor to do that?

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<v Speaker 1>They can help you.

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<v Speaker 4>They would have financial advisors that can assist with that strategy.

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<v Speaker 4>You may have to pay for the advice from the superfund,

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<v Speaker 4>but I would always encourage getting some advice around that,

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<v Speaker 4>because you don't want to sort of pull too much

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<v Speaker 4>out of super can't get it back in, and so

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<v Speaker 4>have a chat with the super fund. They may be

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<v Speaker 4>able to point you in the right direction, but they

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<v Speaker 4>may end up saying, look, go speak to one of

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<v Speaker 4>our advisors and there may be a charge for that.

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<v Speaker 5>Okay, very hellful, Thank you, Blake.

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<v Speaker 1>Thanks Brian, good luck, Brian.

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<v Speaker 2>I think we'll probably you've probably answered a lot of

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<v Speaker 2>this next one on the text line, Blake, but it

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<v Speaker 2>might be slightly different, so I'll ask it anyway. This

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<v Speaker 2>is from Robin who says I have a super account

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<v Speaker 2>where I have nominated my two sons as fifty percent

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<v Speaker 2>each beneficiaries. I understand they would need to pay tax

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<v Speaker 2>at their current tax rate once the funds were distributed

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<v Speaker 2>to them. However, if it was paid to my estate instead,

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<v Speaker 2>are they still liable for tax?

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<v Speaker 4>So the simple answer is yes, they would be liable

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<v Speaker 4>for tax irrespective, but it's not at their marginal tax rates.

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<v Speaker 4>It's at a captu rate of fifteen percent. However, if

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<v Speaker 4>it goes the goes to your sons directly, there's a

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<v Speaker 4>fifteen percent rate of tax plus two percent medicare levy.

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<v Speaker 4>So it's terribly important Whilst you can to try to

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<v Speaker 4>clean up the death tax, of course we need to

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<v Speaker 4>have access to super so generally speaking, over the age

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<v Speaker 4>of sixty. If you've met a conditioner of release, you

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<v Speaker 4>can access SUPER. All be sixty five years of age

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<v Speaker 4>and still working, that's fine, but you have to do

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<v Speaker 4>this before turning seventy five, So terribly important to get

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<v Speaker 4>this right and get this completed in time, Otherwise there

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<v Speaker 4>might be.

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<v Speaker 1>Some taxes paid in it.

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<v Speaker 4>At the end of the day, it just means less

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<v Speaker 4>money going to kids or whoever you're intending, whoever you're

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<v Speaker 4>intending to have the money's go to.

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<v Speaker 2>We've got Mark on the line with another question for you.

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<v Speaker 2>A lot of SUPER questions today, which is understandable, I

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<v Speaker 2>suppose for all the talk around from the federal government.

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<v Speaker 3>Good a Mark, Yeah, good afternoon, Thanks for taking my call.

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<v Speaker 3>I've just got a question in relation to a self

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<v Speaker 3>managed superannuation fund that I've got set up, which I've

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<v Speaker 3>got with two other family members or all trustees. Next year,

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<v Speaker 3>when we meet a condition to release and move it

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<v Speaker 3>from accumulation into pension phase. We have a property within

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<v Speaker 3>the fund. If we were to sell that property next

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<v Speaker 3>year when it's moved into pension phase, is a capital

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<v Speaker 3>gains tax free with im mediate effect, or is there

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<v Speaker 3>like a waiting period before it becomes capital gains tax

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<v Speaker 3>free once the property involved.

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<v Speaker 1>So there's a few things here.

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<v Speaker 4>So one, you've mentioned that there's other family members involved

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<v Speaker 4>in the super fund, So generally speaking, all members would

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<v Speaker 4>need to be in pension phase in order to sell

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<v Speaker 4>the asset tax free. There may be a path for

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<v Speaker 4>segregating assets, but often is the case that that's a

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<v Speaker 4>little bit too tricky to pull off. But generally speaking,

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<v Speaker 4>all members should be in pension phase if you're trying

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<v Speaker 4>to sell it capital gains tax free. The second one

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<v Speaker 4>is just around the timing. So what we want to

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<v Speaker 4>do is, if we're not segregating the assets inside the

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<v Speaker 4>self managed super fund, we want to be in pension

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<v Speaker 4>phase for the full financial year, so that means from

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<v Speaker 4>one July right through to thirty to June. We want

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<v Speaker 4>to be in pension phase through that period because it

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<v Speaker 4>means that one hundred percent of the time, one hundred

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<v Speaker 4>percent of the assets are in pension phase. So that

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<v Speaker 4>way you're selling the asset completely takes free. If, for example,

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<v Speaker 4>you were to go into pension phase on the first

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<v Speaker 4>of January, well only half of that time that's elapsed

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<v Speaker 4>throughout that financial year has been in pension phase and

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<v Speaker 4>so only half of the game will be wiped essentially,

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<v Speaker 4>so there still could be some capital gains.

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<v Speaker 1>So two things to keep.

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<v Speaker 4>In mind, Mark, One is all members need to be

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<v Speaker 4>in pension phase and the second one is all members

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<v Speaker 4>need to be in pension phase for the full financial year,

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<v Speaker 4>so just be cautious of that. Speak to your accountant

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<v Speaker 4>or the self many superfund administrator. They'll be able to

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<v Speaker 4>guide you as to what the possible outcomes will look like.

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<v Speaker 4>But it's a very common strategy. You've got money in

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<v Speaker 4>super you've got an asset a house potentially in soup.

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<v Speaker 4>Your wait until getting to retirement phase to then sell

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<v Speaker 4>that asset. Capital gains tax free, so it's a good

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<v Speaker 4>good move on that side.

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<v Speaker 3>Okay, So essentially you've got to hang on to it

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<v Speaker 3>when you're in pension phase for a good twelve months.

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<v Speaker 3>Aren't all selling that set?

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<v Speaker 1>No?

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<v Speaker 4>Sorry, sorry, Mark, You can sell that straight away. But

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<v Speaker 4>what needs to have happened is you're all in pension

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<v Speaker 4>phase from the start of the financial year, so you

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<v Speaker 4>don't have to hold onto it for the full twelve months.

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<v Speaker 4>You could sell at any time. It's mainly around how

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<v Speaker 4>the members are structured in the superfund that matters more

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<v Speaker 4>so so that property could be sold. But just make

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<v Speaker 4>sure you're all in pension phase for the full financial year.

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<v Speaker 3>For the full financial year. Okay, great, all right, thank

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<v Speaker 3>you very.

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<v Speaker 2>Much, Matt, Thanks for you col mate.

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<v Speaker 1>Good luck with that.

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<v Speaker 2>We'll try and rip through some of these questions on

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<v Speaker 2>the text line Blake, with only a few minutes remaining,

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<v Speaker 2>I wonder how many people actually understand how unitized superfunds operate,

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<v Speaker 2>says Michael, for example, incurring capital gains tax for other

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<v Speaker 2>members cashing out. Does Blake have an opinion on switching

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<v Speaker 2>to an ETF based superfund?

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<v Speaker 3>Ye?

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<v Speaker 4>So unitized fund so industry fun Just think of industry

0:12:01.240 --> 0:12:03.920
<v Speaker 4>funds there you're all in the pool together, so you're

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<v Speaker 4>sharing tax benefits and tax consequences, I suppose. So something

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<v Speaker 4>to bear in mind. If you don't like that idea,

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<v Speaker 4>then consider switching ETF super fund. So there's Vanguard who

0:12:14.160 --> 0:12:17.840
<v Speaker 4>offer ETFs via surper. Look, you can consider that low

0:12:17.920 --> 0:12:21.440
<v Speaker 4>cost way of investing funds. Before you do anything, just.

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<v Speaker 1>Get some advice around. Is that the right move?

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<v Speaker 4>There may be some things that you need to consider.

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<v Speaker 4>Are you invested correctly? Do they invest on your behalf.

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<v Speaker 4>Do you have to choose the investment, so just get

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<v Speaker 4>some advice before moving.

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<v Speaker 2>David has a question on the text line, could you

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<v Speaker 2>advise how long I get to sell my deceased mother's

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<v Speaker 2>house without playing capital gains taxes?

0:12:41.840 --> 0:12:42.280
<v Speaker 1>Exactly?

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<v Speaker 2>Is it exactly two years from her death or is

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<v Speaker 2>it the rest of the financial year plus two full

0:12:47.960 --> 0:12:48.800
<v Speaker 2>financial years.

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<v Speaker 4>Yep, that's a good question. It's two years from the

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<v Speaker 4>date of death. So if you go beyond two years

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<v Speaker 4>from the date of death, what ends up happening is

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<v Speaker 4>the price of the property as it the date of

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<v Speaker 4>death is the cost base of that property, and so

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<v Speaker 4>whatever you sell it for beyond that point, there may

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<v Speaker 4>be some capital gains tax on that portion, not from

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<v Speaker 4>when a parent or a loved one purchased the property Originally.

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<v Speaker 2>Les wants to know, would my children need to pay

0:13:15.920 --> 0:13:18.200
<v Speaker 2>tax with a funeral plan pay out when I die

0:13:18.400 --> 0:13:19.000
<v Speaker 2>it's not in.

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<v Speaker 1>Super generally tax free funeral plans.

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<v Speaker 3>Yes.

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<v Speaker 2>Maryland wants to know. Only heard the very end of

0:13:24.640 --> 0:13:27.760
<v Speaker 2>the beneficiary's entitlement to superinheritance today. Is there some where

0:13:27.760 --> 0:13:29.880
<v Speaker 2>I can hear this interview again as a podcast? Yes,

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<v Speaker 2>I think Joel it'll be up pretty soon after the

0:13:32.880 --> 0:13:36.120
<v Speaker 2>show's finished on the two GB website Maryland, so you

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<v Speaker 2>can get all that. How do you declare you're in

0:13:39.080 --> 0:13:42.280
<v Speaker 2>pension age or pension phase? I think they mean with

0:13:42.440 --> 0:13:43.560
<v Speaker 2>a self managed superfund.

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<v Speaker 4>Okay, so this is paperwork, so speak to the administrator.

0:13:46.320 --> 0:13:48.400
<v Speaker 4>There may be some minutes that need to be signed

0:13:48.400 --> 0:13:51.400
<v Speaker 4>off on, but you're effectively making a self declaration to

0:13:51.440 --> 0:13:53.840
<v Speaker 4>yourself because you are the super fund essentially.

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<v Speaker 2>And I think we've got just enough time to answer

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<v Speaker 2>one more question. Tom wants to know working full time

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<v Speaker 2>employer still put in contributions after I'm seventy five years

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<v Speaker 2>of age.

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<v Speaker 4>Yes, the employer can put in super fund, so as

0:14:07.360 --> 0:14:10.520
<v Speaker 4>long as it's part of your agreements. You're not sort

0:14:10.520 --> 0:14:13.120
<v Speaker 4>of a contract or anything like that. You're employed on

0:14:13.960 --> 0:14:16.640
<v Speaker 4>a full time, part time, casual basis and you're entitled

0:14:16.640 --> 0:14:18.760
<v Speaker 4>to super Yes, super guarantee comes through.

0:14:19.320 --> 0:14:23.120
<v Speaker 2>Okay, Now, don't forget Blake from Pretzel Wealth. We'll be

0:14:23.160 --> 0:14:26.520
<v Speaker 2>back at this time next week, so make sure if

0:14:26.520 --> 0:14:28.440
<v Speaker 2>you haven't got any if you haven't been able to

0:14:28.480 --> 0:14:30.480
<v Speaker 2>get a question in today, you'll get a chance when

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<v Speaker 2>Michael comes back and we do this segment again next week. Blake,

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<v Speaker 2>thank you very much for coming in, made all.

0:14:34.920 --> 0:14:36.720
<v Speaker 1>The best pleasure. Good to see um there he is.

0:14:36.720 --> 0:14:37.960
<v Speaker 1>Blake went from pretzel wealth