'I'll pay tax on dividends for the first time ever'

Taxes - ever evolving, everywhere

'I'll pay tax on dividends for the first time ever'

A generation of mainly elderly investors are discovering that their reliance on investments to provide modest dividend income is about to result in a crippling tax blow. For some, such as reader Susan Scott, aged 77, it will be the first time she has ever had to pay tax on this type of income.

The fact that this tax was introduced by a Conservative government is an added irony.

The solution is apparently to sell to your retirement account/pension fund but then be up for CGT also

An important reminder about structure when buying?

 

Agree, also shows that the boring ol' longer held LICs/ETFs/etc are coming into governments' (worldwide) focus.

Could an option be to buy two sreams of investments - one in super and one outside (but you also have the CGT liability for the shares owned outside super).

Take home for me is that if I'm paying tax, then I must be making money! (but also the importance of correct structuring at the start to minimise the impact later on).

 

My 70 odd year former neighbour seems quite well off, but he tells me he never wants to do another tax return.

I'd be really happy to never complete or submit another tax return... if everything tax wise could just automatically fill and calculate perhaps?
I can see I'd have a lot of private confidental info in one place.... but that happens with taxes...

 

A point missed - this is not for Australia but for UK

 

Cause Aussie dividends usually have a 30% imputation tax credit on them already!

 

As well as getting an $18k tax threshold (so a couple can still get $36k in dividends without paying tax, then more dividends/income up to the point that the franking credits equal the tax due on their total income).

Whether that income affects their pension, FIIK or FIIC - I don't aspire to the pension.

 

And it gets worse, property investing in the UK looks like it won't be as attractive either apparently..
All this with a conservative government.
Tax changes in 2016

 

With the added seniors tax offsets many retired people can earn around $28K or a bit more before paying tax.
Marg