SMSF in Pension mode. Dividends when received will be bigger with Labor.

My wife and I have a SMSF in pension mode containing mostly franked-dividend-paying shares and receive a nice refund of the franking credits.

An acquaintance has told us that if Labor has its way, "because we are in pension mode and therefore not paying tax, we will receive larger dividends up-front, comprising the amounts we are used to combined with the franking credit and we will not have to wait for the refund.."

Is he correct please?

 

is he ?

( i don't know for sure )

factors that may affect the company ( remembering some will still get the full franking benefit if the company pays them )

1. extra costs of paying higher divs ( and lower franking )

2. has the company a better way of using the cash , higher investment in the business and lower debt ( i might not be unhappy about that if done wisely ) or more share buy-backs ( not a personal favorite ) or maybe more acquisitions ( and that can be a mixed bag )

while not having an SMSF i am effectively in pension mode , but still have a little extra cash to invest , i am preferring that cash to go into REITs and international shares ( and ASX listed shares with a major source of foreign income and therefore reduced franking )

i am NOT selling existing holdings strictly because of changes in franking credits ( imagined or actual ) ( i still may sell-down some holding though )

IF the franking policy does change , so might investors strategies ( and create a tiny chance of a policy reversal )

what i CAN tell you is , several companies are paying special dividends to use up existing franking credits ( which might provide a short-term opportunity )

good luck

the election result is not known so am still thinking of strategies ( for several outcomes )

 

SMSF members reminded of dividend reform risk

SMSF members reminded of dividend reform risk | Money Management

the ALP proposal will make some lives more complicated ( maybe triggering some legal challenges , later )

( right where the superannuant doesn't need it , extra uncertainty )