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I'M 56, will never work again and have been receiving income protection insurance benefits for the past 13 years. I wonder if I could salary sacrifice my benefits into super and then take them out as a transition-to-retirement pension? This would boost my super, which hasn't seen any deposits for the past 13 years, and reduce my tax. Accountants I have asked have all run for cover.

I'M 56, will never work again and have been receiving income protection insurance benefits for the past 13 years. I wonder if I could salary sacrifice my benefits into super and then take them out as a transition-to-retirement pension? This would boost my super, which hasn't seen any deposits for the past 13 years, and reduce my tax. Accountants I have asked have all run for cover.

As you are under 65, you can contribute to super without passing the work test, and provided no super is being paid for you, you can claim a tax deduction by making a personal deductible contribution up to your pre-tax contribution cap which is $50,000 for a person of your age. Also, as you are retired, you can start to withdraw an income stream from your fund. Ask your accountant to do the sums, keeping in mind that deductible contributions incur a 15 per cent entry fee.

My husband and I wish to help our grandchildren by acquiring some insurance bonds which could mature in 10 years when the children would be teenagers. We know very little about bonds and would like to know if the accrued interest each year would be taxed at 60 per cent if it exceeds $416. Should a child become incapable of decisions, who could take control of his or her investment?

An insurance bond is a tax-paid investment and does not pay income, there is nothing to declare on anybody's tax return each year therefore, no penalty tax is payable. By holding the bond in the name of yourselves with the child as nominated beneficiary, you retain full control and also have the ability to transfer the bond to the child free of capital gains tax at the end of the term when you feel it is appropriate.

When a person sells shares they have bought personally, the date of purchase and the purchase price of the shares must be provided for tax purposes. If a person is willed shares as a gift and sells them at a later date, must the original purchase price and date of purchase be provided or is the date and price of the transfer to them used in their tax return? When shares are owned jointly and where one person dies, do the shares automatically become the property of the surviving person especially where the deceased has left all assets to that person? If the surviving person wishes to sell those shares at a later date, must the original date and purchase price be used for tax purposes, or is it the date and price they inherited the shares? If you inherit shares you take over the capital gains tax liability that goes with them. Therefore, you are deemed to have bought them at the same price as the deceased paid for them. If shares are owned jointly, they automatically pass to the survivor on death. If the shares were bought before the introduction of capital-gains tax the beneficiary is deemed to have acquired them at their market value at date of death.

Noel Whittaker AM is a co-founder of Whittaker Macnaught. Advice is general and readers should seek their own professional advice.

We have been exhorted to keep working after retirement, which I'm doing, being self-employed. Having reached the age of 75, I find that contributions to super are no longer tax deductible. This is a slap in the face as well as the pocket. There are not many advantages in being this age, so to be penalised for having reached it is grossly unfair. Have you any insight as to why this is so?

It's a sad fact of life that many government regulations lack logic and the inability to contribute to super after age 75 is just one of them. There has been much talk but precious little action about changing the rules to allow older people to contribute.

Contact noel.whittaker@whittaker macnaught.com.au.

Questions to: Ask Noel, Money,

GPO Box 2571, Qld, 4000,

or see moneymanager.com.au/ask-an-expert.


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