AVZ Discussion 2022
- Thread starter GazDix
- Start date
Winenut
Go AVZ!
Thanks for that. Apologies if I got the whole concessional non concessional tax deduction thing wrong
Fuck!.....now I have to go down the tax rabbit hole again!!
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In 2003, a mate in Wollongong bet big on OXR while I bet big on PNA (both Cu explorers in Laos).
While I held mine through the downturn of the GFC and out the other side, he sold his entire holdings around 2006. He pocketed >$3m profit in one hit. Capital Gains Tax, PAYG and other issues sucked the life out of his windfall and almost drove him mad. However, he still managed to drive around in a Lexus.
I never forgot that salient lesson, and as a result time my sales across financial years where possible.
Cheers
F
Winenut
Go AVZ!
The question is will we get a choice with AVZ?
Not counting chickens but if we do get some sort of deal the structure of it is very much out of our hands
If it triggers one big tax/cgt event it would be a tax nightmare
Hence I'm trying to get ahead of the curve and working on the worse case scenario (one single massive tax event) then what are the other strategies available to minimise the pain????....... read "tax"!
Is it likely that a deal of any sort would even result in tax being payable in a 2025 tax return? With all the ins and outs of our current situation I would not have expected a taxable transaction to occur this side of July.
I’m not saying a deal can’t be done soon, but I’m assuming the date of any deal is not the date tax is calculated from for shareholders.
Anyone care to comment on their experience with other takeovers, or similar deals? What has been the timeline from announcement through to actual taxable transactions occurring for shareholders.?
This is a different scheme, that people are talking about.
They're referring to the: Unused concessional cap carry forward.
https://www.ato.gov.au/tax-rates-an...ation-rates-and-thresholds/contributions-caps
Unused concessional cap carry forward
From 1 July 2018 if you have a total superannuation balance of less than $500,000 on 30 June of the previous financial year, you may be entitled to contribute more than the general concessional contributions cap and make additional concessional contributions for any unused amounts.The first year you will be entitled to carry forward unused amounts is the 2019–20 financial year. Unused amounts are available for a maximum of 5 years, after which they will expire.
FYI - tax agents are not able to advise on whether someone should contribute into super - due to regulatory changes.. this requires an AFSL and a Statement of Advice. They can, however, advise you on what your unused concessional cap carry forward amount is, based on the ATO records. However, the ATO records may be out of date or incorrect, so you should also cross reference it with your own understanding (e.g. if you were employed for the last 5 years - one would expect that you would have used a portion of your concessional contributions cap over the last 5 years.
Few things to note
- Contributions to super to claim a deduction and to get your income below a certain amount will not avoid Division 293 Tax. This would be an additional 15% tax on the contributions made to your superfund in the years that you adjusted taxable income is greater than $250K (from the top of my head). This can be paid by the superfund or by you.
- The Deductible Contributions to super will be added back in determining your adjusted taxable income (for Centrelink reasons (child care rebate eligibility), MLS, etc).
General advice on this topic is highly not recommended as following general advice may result in inadvertent tax implications
So tax and/or financial advice should be sought when dealing with superannuation assets and funding/investment strategies.
Side note - my wife is a registered tax agent :^)
PutUsernameHere
Regular
You need to consult an accountant or a financial adviser. If you have a gain of $1M, you will personally be taxed on that $1M gain, less a 50% CGT discount if applicable. So say $500,000 gets added to your assessable income.
You should also look up the limits on unused concessional contributions and eligibility to use them depends on meeting criteria such as your super not being over a certain balance.
If you met the criteria, you could use those contributions to affect/reduce your assessable income. In general, additional concessional contributions can be removed from your assessable income and are instead taxed at a flat rate of 15% in super. However, you also need to consider how Div 293 tax might come into play.
I personally don't know whether it's inclusive of all income or salary only. But if you had a net $500k gain, then you'd be over the income limit for Div 293 which adds an additional 15% tax on your contributions.
It would still likely be advantageous difference of 30% tax vs 47%, but just need to be aware there's limits and those are personal to each individuals situation.
Like all of us, I'm hoping for a resolution that may or may not involve a payout sooner rather than later, but for me, if it is to be a payout, then July 1 will do nicely. It then gives a clear 12 months to make wise decisions instead of rushed ones.While we're on the topic of positive outcomes and tax minimisation, we may well be getting a payout before the end of this financial year.
Well one can only pray and hope of course
If you don't have private health cover, and your payout is going to be considerable, you could be in for a massive hit in the way of 1.5% extra tax for the medicare levy.
Even though there's only a few months left in the year, you can still take a small gamble to minimise it by taking out basic accident cover.
I decided to take that gamble 2 weeks ago when I worked out how much that would cost me otherwise.
Hope that helps someone too
Edit 1: I might add, anything after July 1 is also ok, for the exact same reasons. Except for June 2026. But then, it too might be ok, because we'll have had (hopefully) immenent notifications of what is to come...........
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Retrobyte
Hates a beer
oxxa23
Regular
Agree on thaz's notes here...
But, my wife just spends the money I make as a tax agent... have an accounting firm.
There's a lot of minimisation strategies... but, it's horses for courses and depends on everyone's own financial position and plans/goals
If a transaction involved a sale of shares there's still a small chance it could happen this year. Although more likely next year... if it involved the sale of the project, then a dividend would be next year, not this year... the company would likely give people more time before declaring a framed dividend I would think... and avz pay some tax first
Winenut
Go AVZ!
Agree on the time horizon
Not necessarily expecting to have to deal with any major gain (if any) until the 2025/26 tax year (or beyond)
There's lots of great "pointers" and areas to explore that have been highlighted here but as @oxxa23 has rightfully pointed out everyone potentially has quite unique circumstances which affect how you may choose to deal with any gain event
Your age, who or what entity holds the shares, current balance of your super, other income (if any), whether you can crystalise any other share losses to offset CGT gains, how any deal is structured by AVZ and the other parties (entity sale/cash/scrip/dividend/trailing royalties) your domestic arrangements (single, spouse etc)
Certainly a minefied to navigate so best to get good, professional advice
This may be a once in a lifetime event......you don't want to fuck it up
I can't believe I did that winky thing.....
Not necessarily expecting to have to deal with any major gain (if any) until the 2025/26 tax year (or beyond)
There's lots of great "pointers" and areas to explore that have been highlighted here but as @oxxa23 has rightfully pointed out everyone potentially has quite unique circumstances which affect how you may choose to deal with any gain event
Your age, who or what entity holds the shares, current balance of your super, other income (if any), whether you can crystalise any other share losses to offset CGT gains, how any deal is structured by AVZ and the other parties (entity sale/cash/scrip/dividend/trailing royalties) your domestic arrangements (single, spouse etc)
Certainly a minefied to navigate so best to get good, professional advice
This may be a once in a lifetime event......you don't want to fuck it up
I can't believe I did that winky thing.....
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Ashlee
Regular
I personally don’t want a dividend I want a capital return or something that triggers a CGT event.
Ironic that all this tax money is going to be paid to the same bunch of c.——- that all rushed to our aid when we needed them most.Agree on the time horizon
Not necessarily expecting to have to deal with any major gain (if any) until the 2025/26 tax year (or beyond)
There's lots of great "pointers" and areas to explore that have been highlighted here but as @oxxa23 has rightfully pointed out everyone potentially has quite unique circumstances which affect how you may choose to deal with any gain event
Your age, who or what entity holds the shares, current balance of your super, other income (if any), whether you can crystalise any other share losses to offset CGT gains, how any deal is structured by AVZ and the other parties (entity sale/cash/scrip/dividend/trailing royalties) your domestic arrangements (single, spouse etc)
Certainly a minefied to navigate so best to get good, professional advice
This may be a once in a lifetime event......you don't want to fuck it up
I can't believe I did that winky thing.....
Spikerama
Regular
Ironic that all this tax money is going to be paid to the same bunch of c.——- that all rushed to our aid when we needed them most.
The incumbent or ruling party does not get paid the tax money. They don't own it. It goes to the state. It is state funds. True they may decide how it gets allocated back to funding certain things for the population but that is the same for any tax you pay.
There's an election coming up. "Vote early and vote often!"
LNP believed that Manono was in Australias national interest. LP has not lifted a finger to assist AVZ. Big difference
Spikerama
Regular
LNP or the FIRB?
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