Ask Noel

Your assessable income from employment and reportable fringe benefits must be less than 10 per cent of your total assessable income (before applying deductions) and the grossed-up value of your fringe benefits each financial year. Therefore, the amount you contribute to claim as a deduction does not affect the 10 per cent ratio.

But given your present age, you are only permitted to contribute up to a maximum $100,000 each financial year up to June 30, 2012, under the transitional rules.

With reference to loans for an investment property, I recently read "unfortunately, any money redrawn for private purposes will lose the tax deductibility of the amount withdrawn". Is the reverse true? Once sold, my investment property should provide me with about $200,000. I plan to use this money to buy shares. In the short term, the best place to park the cash seems to be my residential home loan. When I later redraw, will I turn $200,000 of non-deductible debt into tax-deductible debt?

The tax deductibility turns on the purpose of the loan. If you increase your non-deductible home loan for investment purposes, the interest on the new portion of the loan will be tax-deductible. Just keep the loans apart to make it easier at tax-return time.

Interest on my super is taxed at 15 per cent less adjustments. With the recent setbacks to our super, is there any adjustment mechanism for losses? When the market starts to move, are we again taxed 15 per cent as we regain our former position?

Most losses in super are capital losses due to the share market falling. In most cases the shares are held awaiting recovery so no capital loss is triggered. When the market recovers, the increase in value will be tax-free.

This article is general. Seek further advice before making financial decisions.

Recently a friend, whose father passed away, had his father's will overturned. Father and son had not spoken for 25 years and in his will he stipulated that this son should receive nothing from his estate. The son went to court and he was then given 50 per cent of his father's estate. This tells me that wills are ineffective at ensuring your money goes to those you want it to go to. Is there a way to ensure your will is not contested? I am now considering gifting various money, shares and houses I own to my children as I see fit. What gift duty-tax will they be liable for? Where can I find useful information?

You need to understand that there are certain parts of your estate that are outside the will. For example, if you and another party owned a property as joint tenants the property would go to the survivor on death of the other party irrespective of the contents of the will. Money in superannuation does not come under the will - it is dispersed by the trustee of the superannuation fund who has the final say unless you have a current binding nomination that irrevocably instructs the trustee to pay the proceeds of your superannuation in a certain way. I suggest you seek the advice of a lawyer who is an expert in estate planning - there is no gift duty or death duty in Australia but capital gains tax may be possible on bequeathed assets when disposed of by the beneficiary.

Questions to Ask Noel, Money, GPO Box 2571, Qld, 4000, or see moneymanager.smh.com.au/sitewide/askanexpert.html.