Super tax questions

Few questions I have,

1) If i rollover my super from one provider to another, do I have to pay capital gains tax.

2) If i switch investment option for super with the same provider, do I have to pay CGT here ?

Thanks,
Calvin

 

Hi Calvin.

To answer your questions - technically no - there will be no CGT just because you rollover or change between different investment options.

However, just as in a managed fund, the fund managers of your super fund continuously buy and sell assets as part of the funds investment strategy and incur capital gains which gets allocated against your members account periodically - you don't see these amounts - it is simply reflected in the unit pricing of your particular investment option.

It is hard to explain - but the answer to your questions is no.

SM

 

SM,

Ok so the CGT and other taxes if any are already paid by the fund and the unit price is adjusted accordingly. That's cool I understand that.

But if I have say my own money (not super) invested in a managed fund, and I sell the units then I incur the CGT, am I right ? Doesn't that mean we get taxed two times. In case of dividends one can get franking credits, but in the case of CGT I don't think there is any such thing. Is that correct ?

Calvin

 

This is only for unitised super portfolios and normally the adjustment is made for every struck unit price (i.e. daily), unit prices for managed funds (Investment Portfolios) do not have franking credits, tax liabilties or even tax assets in the unit price and tax flows through to the investor at their rates.

Yes, selling your units will trigger a CGT event. Tax will be payable on the realised gain (possibly discounted if held > 12 months).

You're only taxed once as Investment funds do not have tax assets in the unit price as above.

J.