u/inverloch72

Thoughts on the budget as it applies to me:
High income self-funded and early retiree with discretionary trusts and spare cash

(1) 30% tax on discretionary trusts

I'm already pumping a sufficient amount through two discretionary trusts that the beneficiaries are all paying more than 30%. So no real downside to this other than a bit of admin time.

Impact on me: NEUTRAL

(2) Limitation of negative gearing

Over the last 20 years I've built a solid little rental portfolio that is well and truly positively geared. If I chose to buy more properties that were negatively geared, the losses would be gobbled up by the net income of the other properties. So no real impact on me.

But... these changes are expected to put downward pressure on property prices, and that will give rise to buying opportunities.

Impact on me: FAVOURABLE

(3) Capital Gains Tax indexation and minimum 30% tax rate

Based on my investments right now, assume unindexed cost base of $100 and a market value of $150 (so a 50% gain across all asset classes). At present, this would mean a net capital gain of $25 subject to tax at a blended rate of about 40% = tax to pay of $10.

Setting aside that gains to 30 June 2027 stay under the old system, the indexed cost base of my assets is likely around 120 to 125. On this basis, the net capital gain is likely to be $25 to 30. At a blended rate of about 40%, tax to pay is slightly higher, but not by much!

Impact on me: NEUTRAL TO SLIGHTLY UNFAVOURABLE

Conclusion

For me, these changes don't have too much bite as I'm inevitably stuck in the top tax bracket. For those who are in a lower tax bracket - and especially those paying less than 30% - these changes are really going to bite and will impact wealth creation.

I feel especially bad for young people who have been doing the right thing - saving and investing in ETFs in order to build up a nest egg. They're going to get hit pretty hard, especially by the CGT that bites into their investment (with a minimum tax of 30%) when they inevitably sell to buy a home. The winners are the people who don't have savings and have never taken any initiative to get ahead financially.

I ordered a Model Y long range with FSD ($10,100 less $2070 discount) about 10 weeks ago. It will soon be ready for collection and Tesla have said I can cancel the pre-paid FSD if I wish and just buy it monthly.

Wondering whether it’s better to stick with the FSD purchased outright, or go with the monthly subscription.

My employer in the past has purchased a car (of my choosing, within reason) and provided it to me to use as part of my package. There is no salary sacrifice required. Think of my package as "$X salary + car". If I leave, I have to give the car back.

I'm coming up to the point where I am entitled to get a new car (bascially, every 3 years) and was going to get a Tesla Y with value about $82,000.

So this would be FBT free until 2027. But what about beyond 2027?

If it were under a novated lease (from 2026), it would continue to be fully FBT exempt. However, does the full exemption continue to apply if the company has purchased the car outright, or will it be just the 25% FBT discount from 2027?

Thanks.

My employer in the past has purchased a car (of my choosing, within reason) and provided it to me to use as part of my package. There is no salary sacrifice required. Think of my package as "$X salary + car". If I leave, I have to give the car back.

I'm coming up to the point where I am entitled to get a new car (bascially, every 3 years) and was going to get a Tesla Y with value about $82,000.

So this would be FBT free until 2027. But what about beyond 2027?

If it were under a novated lease (from 2026), it would continue tobe fully FBT exempt. However, does the full exemption continue to apply if the company has purchased the car outright, or will it be just the 25% FBT discount from 2027?

Hello. I'm looking for an ETF that pays very little in the way of distributions in favour of higher capital growth. Preference is for something that's ~30% Aus; 30% USA; 40% rest of world.

Any suggestions? Thanks

EDIT: I’ll be investing for a minor so wish to minimising income.

I realise investing in a minor’s name is not optimal, but it’s inevitable given the extent of the income I’m dealing with. Yeah, nice problem to have.

I have a question regarding a deceased estate. The estate has earned income (obviously, post DoD). The executor will file a trust tax return and I understand the trust of the deceased estate is entitled to adult individual tax rates (for three years from DoD).

Once the trustee has paid tax on the income, what happens then? Can it be distributed to beneficiaries without further tax?

So let's suppose the income of the deceased estate is $80k, and the trustee pays tax of $15,000 so there's $65,000 left over. Is the $65k distributed tax free given it has already been taxed?

We all join Committee to assist with and ensure effective building management. Committees often comprise people with the right skills and attitudes, but they can also comprises some extremes. Tell us about your most extreme, crazy, painful Committee member. There must be some great stories out there.