Originally posted by occam
sorry if I wasn’t clear. I will make the proposition clearer. If I closed down my SMSF and put it all in my own name invested in fully franked Australian shares.Then I would get the first $18,000 tax free and I assume I would also get the benefit of franking credits to reduce my taxable income to zero ?
Hi,
That may make you worse off. Feel free to slag off if I have it wrong people, but with figures please.
Let's say you have 600k, gross yield of ff shares 7% [4.9% divi, 2.1% credit].
Therefore , in super fund, income of 29.4k.[ie no fc refund]
Now take it out, assume the same shares,
Gross income 42k: 29.4k cash, 12.4k fc
Tax payable on 42k, about 5k. But this is paid off by your credits, so no tax payable, but also, no refund of the other 7k credits.
So, final position, 29.4 k either way?
Now, you do save yourself the costs of running a smsf, but medicare levy comes into play?
Someone in this situation should not take my advice, but I would do one of 2 things.
1. put it in an industry fund
2. if I was taking it all out, I would have about most of it in unfranked divi paying shares or the like.
But if you do that, why not just do the same thing inside the super fund?
Most likely number 1
If I couldn't bear to be without my SMSF, I would have bugger all franking credits generating investments in it.
I'm making the assumption that the fund is in pension phase, and I've ignored the senior's offset
cheers
