Eureka Correspondence

Enlarging the family home, looking at income-focused funds and another tax on super.

Enlarging the family home

Bob Gottliebsen's article (Asset allocation alert 3: Post-Budget tax tactics, May 20) reminded me of a homestay trip around New Zealand, in the 1990s, where several retired couples had added rooms on to their homes to rent out to travellers. I guess with the advent of Airbnb this is another way to supplement the retirement income. It would be preferable to having the children live with you forever.

Jan

Income-focused funds

How about a review of funds such as HVST and AOD and their suitability as an income source? Dividend is paid monthly and there are risk strategies in place according to the fund managers. But how do they stack up? What are the pros and cons? Thank you!

Fiona

Editor’s response: Thanks for your letter. We’ll keep your suggestion in mind. In the meantime, we have published some comments on HVST here: In defence of ETFs (May 6).

Another tax on super

I note that in your comments about superannuation earnings being currently tax free that nobody has mentioned the 30 per cent tax that must be paid when the fund is closed and the remaining assets are transferred to a beneficiary/s upon the death of the last "super partner". Surely this tax revenue must be included in the calculations of the so called tax free benefits to the SMSF pensions. I suspect that either Treasury or the Tax Office would be able to provide the exact amount and future estimates of this growing tax revenue.

Further, Robert you have been banging on about the need for the government to tap into the money held by SMSFs for infrastructure purposes. In my opinion it would not be too difficult to "kill two birds with one stone" by offering SMSFs the choice of paying tax on earnings over an acceptable indexed threshold, say, $150,000 or not paying tax if assets earning income over the threshold were invested in a government owned infrastructure fund that paid a reasonable rate of return. In this way the young journalists and the politicians would be satisfied, plus we could get Australia going with much needed infrastructure.

Terry