Managed Funds Who should hold the fund?

Discussion in 'Shares & Funds' started by GregB__, 20th Aug, 2007.

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  1. Simon

    Simon Well-Known Member

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    Righto I stand corrected.

    When I think about it we ended up this way because my wife already owned shares and I used them as security to remove any likelihood of a margin call. Funny how that 20% LVR has wandered up to 53% over the years. Massive buying not underperformance of my picks.

    Thanks mate for showing me my error.:)
     
  2. Rob G

    Rob G Well-Known Member

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    By keeping the spouse within the Dependant Spouse Rebate income range, she is on an effective tax rate of 25%+ .

    BUT she can claim deductions for this that normally are not allowed.

    For instance, deductions for child minding and travel to the centre & work where she has a part-time job that requires this. Passive investment income is not so easy, but franking credits are not counted for Rebate income purposes.

    Joint tenants have a right of survivorship. So if one dies, then property passes to the other without going through the deceased estate. No chance of weird unknown relatives or creditors appearing for a grab.

    It is often very inconvenient to register joint names on an investment as it requires both signatures for everything, but with husband and wife provided joint income is declared in tax returns then there MAY be a presumption of joint ownership in equity.

    NORMALLY, positive geared investments are held in the name of the low rate taxpayer and negative geared in the high rates. But over time investments tend to become positive, and CGT at disposal can push the seller into a higher tax bracket.

    The only reason I am bothering is to emphasise that tax is only one consideration as part of your overall financial plan.

    Cheers,

    Rob
     
  3. Simon

    Simon Well-Known Member

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    Good points mate. I have learnt something today. Ta :)
     
  4. TechMan

    TechMan Well-Known Member

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    Really, if the limit is $22 302 of income, doesn'tthis places the spouse in the 15% tax bracket?

    This is good to hear about the deductions. when you say passive income is not so easy, what does that mean? It is counted for rebate income purposes?

    As a fund like Navra is an income fund there won't be as much growth as say a normal batch of shares. So i don't think CGT is such a big issue.

    I didn't quite understand the estate planning stuff you explained. Are you implying that if income fund units were held in a wife's name and then she passed away, that the husband would have a hard time claiming ownership if all income was going to her? I would imagine a simple will would sort this out.

    i understand that you are looking at this from different angles, this is good. It just looks like all angles at the moment are still holding less weight than the current day tax implications. ;-)