Franking Credits Chart

Just a thought. It seems to me that for someone below the tax-free threshold, an investment in high-dividend ETF, LICs or direct stocks would be more effective than a first home super account due to the benefits of the full franking credit.

Comments?

 

Your chart does not mention the fact that, if the dividends are high enough, you will be bumped up into the next tax bracket because of the grossed up total (not the actual dividend) added to your other income.

Anyone close to the top of a tax bracket should take this into account.
Marg

 

That 19% after-tax dividend amount should read ($70 + $11) ie. the tax refund is $11, not $19 as indicated by ($70 + $19).

 

You've failed to take into account RISK . A super fund won't be 100% in equities but in a balanced portfolio.

 

Depends on the time frame. If you want to access the money in a couple of years the share market may be a bit risky. You may need time to ride through a sudden downturn.
Marg

 

My understanding was that the money gets put in at 15%, as per normal, but when you take it out it's taxed at your MTR with a 30% tax credit (functioning similarly to but completely different from franking)