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Wealth Management - tips on managing your wealth
Below currency is in AUD.
To offset the impact of the introduction of GST (Goods and Service Tax) in 2000, the Commonwealth has assisted those who buy or build their first homes through the State and Territories by offering a one-off payment of $7,000 FHOG (First Home Owner Grant). There have been additional payments of $7,000 or $3,000 for building contracts signed before Jun 2002 and completed by Jun 2004. If you have missed out in the early years and you are buying or building your first home now, you can still be eligible for the $7,000 FHOG. The grant is not taxable. The applicant is not subject to any means test, other than to meet a few criteria on resident status, ownership and occupancy. For application, please check the Revenue Office in your State.
If you are a low or middle income earner, you may be eligible for the Government Superannuation Co-contribution. The Government will match a dollar fifty cents up to a maximum of $1,500 p.a. to every dollar of your personal contribution. If you are a permanent resident aged less than 71, your total income is less than $58,000 and more than 10% of your income comes from employment, you may be eligible for the co-contribution. Any income in excess of $28,000 will have the maximum co-contribution reduced by 5 percent on the excess. For further details, please visit ATO.
From 1 Jul 2006, if your total taxable income is below $40,000, you may be eligible for a tax rebate. The maximum tax rebate is $600 for those earning $25,000 or less. The tax rebate will be scaled back for any amount in excess of $25,000 by 4%.
The fiscal year end in Australia is 30 Jun. Below does not include 1.5% medicare levy. Non-residents do not have to pay medicare levy.
Below currency is in AUD.
Income tax rate for 2007-08 :
Taxable income
$0 – $6,000
$6,001 – $30,000
$30,001 – $75,000
$75,001 – $150,000
Over $150,000
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Tax rate for Residents
Nil
15%
30%
40%
45%
|
Tax rate for Non-residents
29%
29%
30%
40%
45%
|
Income tax rate for 2006-07 :
Taxable income
$0 – $6,000
$6,001 – $25,000
$25,001 – $75,000
$75,001 – $150,000
Over $150,000
|
Tax rate for Residents
Nil
15%
30%
40%
45%
|
Tax rate for Non-residents
29%
29%
30%
40%
45%
|
Income tax rate for 2005-06 :
Taxable Income
$0 – $6,000
$6,001 – $21,600
$21,601 – $63,000
$63,001 – $95,000
Over $95,000
|
Tax rate for Residents
Nil
15%
30%
42%
47%
|
Tax rate for Non-residents
29%
29%
30%
42%
47%
|
Below currency is in AUD.
Employers are required to pay 9% superannuation on eligible employee earnings into complying superannuation fund or retirement savings account by the 28th of the month following each quarter-end. To be entitled for an employer superannuation contribution, an employee must age between 18-70 and earn $450 or more in a calendar month. If you are under 18, you must work at least 30 hours a week to be entitled to the compulsory employer superannuation contribution. For high income earners, any earnings in excess of $35,240 a quarter in 2006-07 will be disregarded.
An employer may contribute more than the compulsory superannuation but the total amount, concessional contribution, is capped at $50,000 (indexed annually) a year.
Concessional superannuation contribution is a pre-tax remuneration item of the employee and a tax deductible expense to the employer. Concessional contribution attracts 15% income tax in the superannuation fund and any amount over the cap will be subject to extra tax.
If you are a low income earner, your personal contribution may be eligible for the government co-contribution, as mentioned in the earlier section.
Personal contribution is an after-tax item paid out of an individual's pocket and non-concessional.
If you age between 65-74, you must work at least 40 hours during a 30 days' period in a financial year before you can make any non-concessional contribution. Work test is not required for those under 65.
You can make up to $150,000 non-concessional contribution a year, which is three times the concessional cap. If you are 65 or over in any financial year, you can bring forward a lump sum contribution up to $450,000 over a three year period.
Conditions apply to the above contribution rules. Too much superannuation will mean tax at a high marginal rate.
If you have several superannuation funds, you are advised to consolidate them to avoid unnecessary administration cost. If you are not sure which superannuation funds your former employers have contributed for you, go to ATO or SuperSearch to locate your lost superannuation account.
Eligible temporary residents who work in Australia, and have superannuation contributions paid by their employer, are entitled to receive their superannuation benefits when they leave Australia for good. This payment is called the Departing Australia Superannuation Payment (DASP). Please check ATO for more details.
Coming soon. Meanwhile, below articles may give you insight on wealth management.
Beware of the super villains
The Age - 30 Apr 2008
More shares at a discount The Age - 30 Apr 2008
Invest in shares without buying them directly The Age - 27 Apr 2008
See the light on shadow shares The Age - 27 Apr 2008
Tax office's red flag The Age - 23 Apr 2008
It's not the time to panic The Age - 20 Apr 2008
Why it's never too soon to think of retirement The Age - 20 Apr 2008
Go it alone. The Age - 1 Nov 2006
On the hunt for a capital idea. Resorting to a reverse mortgage is not the only way to supplement retirement income. The Age - 1 Nov 2006
Now's the time to shovel money into super. Some people could even consider borrowing $1 million to top up their fund before next July, George Liondis writes. The Age - 29 Oct 2006
The gap between what people need to save for a comfortable retirement and what they are actually saving is growing... Equity release is one possible solution ... It is important that customers receive appropriate advice. Aviva - 4 May 2006
Pecked to bits. Investors often don't know who's getting paid from their investments ... The Age - 3 May 2006
Disclaimer :
Opinions and views expressed in this page and any other pages in our website are private. In no circumstances should any materials and information provided in our website be misconstrued as an inducement to act. We are not responsible for any decision made by the readers. This website is for mature adults with a sound mind. Should you be interested in investing in shares, we recommend you to consult a licensed and trustworthy financial planner, who after collecting relevant facts and conducting due diligence, will provide financial advices relevant to your personal circumstances.
The above rates and interpretation of legislations are for reference only. We are not responsible for any decision which you may make. Please check the government sites for the latest updates or consult qualified accountants for advices.
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