I have an income-protection policy underwritten by an American company, for which I pay monthly premiums of $135. Can I deduct this policy on my Australian tax return? I understand this type of policy is a deductible item but what if the payments are made to an American company and not an Australian insurance company?
I have an income-protection policy underwritten by an American company, for which I pay monthly premiums of $135. Can I deduct this policy on my Australian tax return? I understand this type of policy is a deductible item but what if the payments are made to an American company and not an Australian insurance company?The premiums will be tax-deductible irrespective of the policy's origin.I am 66 and have inherited $100,000, which I want to place into super as a non-concessional contribution. I cannot meet the work test because I am totally and permanently disabled and have not been able to work for 30 years. Can I get an exemption from the work test? If not, how do I effect this transaction? Presently, I have $400,000 in four super funds.The laws are strict regarding eligibility to contribute to super but keep in mind that one of the main purposes of transferring money into super is to save tax. Options include using the $100,000 for current spending while reducing withdrawals from your super, or investing in quality shares paying franked dividends. The income from these would almost certainly be tax-free for someone in your income bracket.My wife and I are 51. We own our home, an investment home and a holiday shack. Our home is worth $2 million and we owe $250,000 on it. The investment property we first lived in is worth $1 million with no debt, and the shack is worth $600,000 with no debt. Our combined super is $250,000. My plan in a few more years would be to sell the property we live in once the kids move on, which would not be subject to capital gains, then move back into the home we had when we were married. That would give us $2 million and we would be living in a home we own. We would probably downsize from that one in the future as well. I'd like to keep the river shack. I'm not sure what to do with the $2 million leaving it in the bank is only going to devalue it. Should I invest it in the sharemarket through our accountant as I'm not confident investing that much?For starters, you don't need to make a decision until the money's in the bank. In the meantime, you should be gathering as much information as you can about the behaviour of different asset classes. A good portfolio should be balanced across cash, property and shares, and you should be forming an association with a reputable adviser now who can eventually help you decide on a portfolio that suits your goals and your risk profile.My husband is 80 and I'm 76. We're both self-funded retirees with no government pension and we both pay tax. We want to give $100,000 to our grandsons aged two and four for their education when they go to secondary school. What is the best investment to give them access to the money when they start secondary education?The perfect investment is investment bonds because there is nothing to declare on anyone's tax return each year and the bonds can be transferred tax-free to each grandchild at an appropriate time. A big advantage for elderly donors is that investment bonds cannot be challenged under your will. An adviser will be able to explain the advantages and disadvantages of investment bonds to you.I have read your recent article on superannuation splitting and would like to transfer some of my super to my spouse. The problem is, the amounts I'm considering moving would exceed the $450,000 non-concessional cap for the next three years. My wife, on the other hand, has very little in her super fund. How much am I able to split with her?You can't transfer non-concessional contributions between spouses this is limited to concessional contributions. However, if you have reached your preservation age and have satisfied a condition of release, you could make tax-free withdrawals and give the money to your wife to enable her to make a non-concessional contribution. Keep in mind there are strict criteria about eligibility to make contributions, so it's important that you seek advice.Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature. Readers should seek their own professional advice. Email: firstname.lastname@example.org.I have shares and I'm paying high interest rates on a $55,000 margin loan. I'm not happy with the company's service and would like to pay out the margin loan by redrawing from my home loan. How does this affect the tax deductibility of the interest? Am I still able to claim it as a tax deduction even though it's through my home loan? The shares are blue-chip stocks that pay fully franked dividends.You can certainly pay out the loan with another loan and maintain the tax deductibility, but you should keep the new loan strictly separate from your non-deductible home loan. The easiest way might be to get a new loan just for this purpose.