LIC & LIT Listed Investment Companies (LICs) 2019

Probably like me. Doesn’t follow holdings, can’t remember anything but knows how to use a SEARCH function.

 

Um, not sure if the comment was directed to me. I don't hold DJW. @RayO had a question and seemed to be having difficulty in finding the information. Easy as for me as I know where and how so I did it.

 

@Nodrog I do use the Search function first whenever i can. In this case i did before posting and tried again after your blunt comment. Still couldn't find anything useful with all the tabs i opened.
I don't hold it and am not familiar with DJW, it was just out of curiosity since it's what was being discussed at the time.
@SatayKing was kind enough to provide some helpful links that allowed me to look at it. I don't think i would have found it if i had to dig through it till 2016

 

If you re-read his comment, I think you will appreciate that @Nodrog was having a light hearted dig at himself, not you

 

Is anyone like me, and surprised that the Stock Market continued as if we were not having an election following along on what the US market was doing. I probably have it wrong but I would have thought that the market would have responded to BS possibly being elected with a slowing down or something.

 

The longer you invest in the market the more you learn that nothing should be a surprise. The market can do anything really and it’s madness trying to figure out the what or why of short term movements.

Could be that the expected slowdown is neutralised by expected interest rate cuts. Who knows...just keep buying when you have cash

 

Just finished reading these whilst waiting for the kids at school pick up

How Labor can't touch these multimillionaires and their franking credits

Retirees find a way to dodge franking credit crackdown

 

Thanks @geoffw , it opens up for me and I don't pay for access?

Essentially like the first link

Retirees with self-managed super funds could dodge Bill Shorten’s franking credit crackdown by shifting Australian equities into bank-run retail or industry funds that are in a “net tax” position, potentially blowing a hole in Labor’s $56 billion revenue projections.

“To minimise the impact of the policy change, one of the options available for an existing SMSF in a net refund position is to move its assets or at least the Australian shares portion of the SMSF to a retail or industry super fund in a net tax position”

SMSF owners could also add their children into the trust structure to offset the low-tax position of retired members in the fund. More than 90 per cent of SMSFs have either one or two members. If retirees include their children in the trust, it could result in a tax liability, which would allow franking credit income to continue.

 

Thread drift.

No way do I prefer to add a person to the SMSF who may only have a couple of bucks involved but can have the possible opportunity to direct my funds which form the major, major portion of the fund.

 

Back on the topic.

WHF 10c ff, 100% LIC Capital Gain. Payable 12 June.

 

More accurately, I assume, they would have to move funds into a fund that allows member direct style investments.

My curent Australian Super does, but for franking specific investments you are restricted to direct shares or basically VAS, STW and VHY.

Hostplus allows you to choose LICs.

 

10c cash in bank account, 4.28c franking credit and 7.14c tax deduction. Have I got that right? Effectively a tax payed dividend with small tax credit/offset even for those on the top MTR by my calculations. Love those surprise LIC capital gains deductions.

 

How does the extra 7.14c tax deduction work?

I get the 10c dividend and 4.28c franking credit.

 

I could have it wrong, but I'm assuming that 100% lic CG means 100% of assessable income which is the grossed up dividend. The deduction from assessable income for CG is then at 50%, so 14.28 minus 50% of 14.28c.

CGT listed investment companies concession

 

I’m assuming that the 100% LIC capital gain means that they are not classed as active traders so there is no capital gains tax payable on capital growth.

I don’t think that affects your tax unless you sell, but I would keen to learn if I am wrong.

 

I might be confused. Maybe a tax agent could confirm @Paul@PFI @Terry_w

From the asx dividend/distribution notice

"The dividend is 100% attributed to LIC Discount Capital Gains and tax details will be provided on dividends statementssent to shareholders."

 

I believe you may be right @ChrisP73.

I leave such arcane matters to the accountant now.

Worked example:

Dividend: $700
Franking:$300 (700x3/7)*
Total: $1,000
Deduction: $500 ($333 for Super @ 33 1/3)

* If I was into doing this stuff to the extent I was in the past I'd be highly annoyed at the additional mental strain and key strokes required with franking @ 27.5% ($700x27.5/72.5). Considering I've paid taxes all my life............