Ask Noel

If a property is bought before September 1985 with a mortgage, then it is refinanced and a line-of-credit is obtained on that refinanced property, is it still a capital gains tax-free investment? And if a property that was bought before September 1985 is paid off and a line-of-credit from the bank is obtained by using the paid-off property, would it affect the tax-free status of that property?

If a property is bought before September 1985 with a mortgage, then it is refinanced and a line-of-credit is obtained on that refinanced property, is it still a capital gains tax-free investment? And if a property that was bought before September 1985 is paid off and a line-of-credit from the bank is obtained by using the paid-off property, would it affect the tax-free status of that property?

Liability for capital gains tax depends on the date the asset was acquired. Any loans taken out in connection with the property has no bearing on the CGT liability.

Do you see gold and silver as good investments at the moment?

I appreciate that there are fans of precious metals, but in my view investing in them is no more than speculating on commodity prices. I prefer shares and property, where it's possible to make a decision based on the inherent qualities and income of the asset. However, you are the only one who can decide if precious metals are an appropriate investment for your own situation.

What guarantee do industry pension funds have if there is another global financial crisis? Are they covered by the government deposit guarantee?

No superannuation fund is covered by the government deposit guarantee, but you should keep in mind that superannuation is not an asset class such as property or shares, merely a vehicle that lets you hold assets in a low-tax area. Therefore, the behaviour of the fund will mirror the assets it holds. Make sure you take advice to ensure the assets held by your fund match your goals and your risk profile.

My wife earns $23,500 from casual work and $1800 from share dividends, which are reinvested. To offset my ability to salary sacrifice $25,000 and not the previous $50,000, we were going to salary sacrifice most of her wages into super, until your recent article reminded me that she would be taxed at 15 per cent, equal to $3525. We contribute $1000 a year to her super to receive the government

co-contribution. What is the most sensible and tax-effective thing to do with her salary to save for our retirement?

As you point out, there is little to be gained by your wife salary sacrificing to super, but I agree that she should make a $1000 non-concessional contribution to become eligible for the $500 co-contribution. I doubt if you would be eligible for a co-contribution because the cut-off point has been reduced to just $46,920 and I assume your income would be above this if you were considering making a $50,000 deductible contribution. The simplest option might be to make non-concessional contributions to super with any spare money. This will at least keep the earnings on it in the 15 per cent tax bracket.

Is it possible to transfer $60,000 from my super fund to my wife's super fund? It is my intention to retire early next year and to maximise certain benefits from Centrelink. Its financial services officer has suggested it would be to my advantage to make this transfer. I am aware of the new cap for super contributions being $25,000 a year however, in my ignorance, I would consider a transfer from super A to super B would not breach this new rule.

You cannot transfer non-concessional funds from one member's super account to another but, provided the fund will accept the request, you can transfer part of your concessional contributions to your spouse. If you are to obtain a Centrelink benefit by holding money in your wife's super account, I would imagine you are close to 65 and your wife would be under pensionable age. Therefore, you should be able to make a withdrawal from your super fund and give the money to your wife, who could then make a contribution in her own right. Just make sure you take advice before you make the transaction.

I'm looking for an investment for our grandchildren that will give them a flying start to having their own investment portfolio in adult life. But it must not be a hassle for either the parents or the grandchildren. I was contemplating an investment bond, but my broker says the costs and charges are too high to be acceptable. I would appreciate your comments on this.

Investment bonds are great investments for your grandchildren and the charges are not excessive. For example, Austock Life has an investment bond called ChildBuilder. It has an investment menu with varying ongoing fees and a pretty low 0.65 per cent per annum for its managed term deposits option, and even lower for its cash option. KeyInvest offers a similar bond and, for a slightly higher fee, your funds are professionally managed by leading multi-manager Russell Investments, which finds quality investment managers on your behalf. Both types of insurance bonds use a menu of managed funds, and their performance will mirror the assets in which they invest.

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: noelwhit@gmail.com.

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