Lifewealth Group

Lifewealth exists to achieve peace of mind and happiness for our clients, people and communities by understanding what matters to them most.

[Dekka @DerekFranc90653]

See below great analysis from Chris Brycki, you pay 82 per cent more tax. Basically the same as my results. Under new CGT system you get screwed no matter what!
https://t.co/RV3JDIANjl

[Geoff Wilson @GeoffWilsonWAM]

Economic vandalism.
Chalmers’ tax hikes crush productivity and capital formation instead of growing the pie.
A disaster for all aspirations Australians
Spot on, Ben. #auspol

[Lifewealth Group @LifewealthGroup]

@linzcom Australian productivity is already dead. The Government just slapped SME’s in the face and gave them a tax hike into a stalling economy with terrible productivity. Capital allocations into venture and PE will be heading offshore. It’s done. This is a disaster for capital markets.

[Aus Integrity @QBCCIntegrity]

It’s deeply concerning how many laws the Albanese Labor Government is forcing through which are offensive to the constitution, but will require high court cases to be brought.

This is a malicious government with zero concern for Australian rule of law.

[Robin Dods @toy59496]

ETF Modelling: High-Dividend vs Growth vs Tax Residency for 4 common ETFs

I've run through scenarios for the final after tax yield for four different common ETFs based on the new tax settings.

The first scenario is a high income earner that is at the 47% tax threshold. They should remain on a growth ETF.

The second scenario is the retired person on 0% tax rate, it makes perfect sense for them to be on high dividend ETF.

The third scenario is having these ETFs within a company structure at 30% tax rate which has not delivered nearly as much excess return as I would have thought. I'm very disappointed about that one. It is superior but not as much as I would have expected to justify the additional paperwork and accounting fees.

The final model is as a foreign investor where you pay 30% company tax on any dividend and do not get any imputation credits. But you do not pay any capital gains if you are in a jurisdiction which does not tax foreign income. Obviously the final return is astoundingly more for you. You are much better off to be a foreign resident investing within Australia than an Australian investing in Australia. I have claimed previously that this can be viewed as economic treason, and it should be the reverse.

Note that two of those ETFs are US and have markedly higher returns as they are based on the last 10 years but historically this has almost always been true.

I have a personal comparison on that final point as my wife's superannuation is a wrap around of the ASX 300 and my superannuation is a wrap around of the S&P 500. Being a good man I put in a great deal more money into her superannuation than my own over the years and yet my current total is considerably larger because it's in the S&P 500. That's today, we don't know what will happen tomorrow.

Images below.

[Michael J. Biercuk @MJBiercuk]

Frustrated by stagnating wages & bad corporate behaviour that has dominated the ASX for decades?

With new #CGT changes, old, low-growth companies offering fully franked dividends ** AND PROPERTY** will be by far the most attractive investments for AU investors.

@chrisbrycki

[Graham Young @GrahamY]

The theory underlying Chalmer's belief that investment taxation and wage taxation should align. It's called the surplus value theory and it was invented by Karl Marx. It assigns no value to the skills, knowledge, risk-taking and investment of the entrepreneur and holds that any return they get is essentially stolen from the worker.

[My Word Is My Bond 🇦🇺 @jgrogan222]

Dont let Albo or Chalmers gaslight you to think the new CGT regime is somehow better.

[Financial Review @FinancialReview]

Tax experts and philanthropy advisers have been shocked to discover that the CGT legislation rushed into parliament this week will inadvertently hit charities. https://t.co/q8wZONJWvz

[Lucy Graham @montrosegraham]

UNCONSTITUTIONAL: Anthony Albanese's tax legislation is a clear, flagrant breach of the Australian Constitution.
It mandates that any taxation law must deal with one matter of taxation only.
Albanese has bundled them together in his eagerness and haste to fleece taxpayers.

[Geoff Wilson @GeoffWilsonWAM]

Spot on. Labor’s CGT changes are economic self-harm.
This isn’t ‘fairness’ — it’s a direct assault on aspiration, startups, retirees, and productive investment in businesses. Australia already sits in the high side for CGT. Pushing effective rates higher makes us uncompetitive and kills the very capital formation we need for growth.
Say NO to the biggest anti-investment tax grab this century. Grandfather existing assets and incentivise new productive capital instead.

[Robin Dods @toy59496]

Economic Treason: Selling Australia Through Tax Policy

The economic theft hidden within the new CGT policy is not just the extra tax collected on citizens today, but that the lack of taxation on foreigners means compounding will rapidly transfer our sovereign assets into foreign hands.

In the example shown, an asset that begins 50% Australian-owned and 50% foreign-owned ends up only 17% Australian-owned after 20 years, with foreign ownership rising to 83%. No takeover bid. No invasion. Just mathematics.

Einstein called compounding the "eighth wonder of the world," emphasizing that its power is so vast it dictates whether you build wealth or pay the price. The new tax settings mean we pay a very high price indeed. We pay with our home.

You might think the starting proportion of ownership is unrealistic at 50% each. In fact it's worse than you think, as the image shows 70% of our mining productive assets are already in foreign hands. With the disincentive for retail investors to invest in small miners you can effectively kiss our major export industry goodbye, as the effective portfolio tax means only foreigners will be incentivised to invest in these small miners. The structural failures of this new tax system are immense.

Sovereignty is ultimately about control. If we progressively lose control of the farms, mines, companies and productive assets of Australians we will eventually be subservient to an overseas economic Hegemon.

Arguably in relation to mining we already are subservient, and we urgently need to pivot the tax burden to advantage compounding to our citizens relative to foreigners. And yet your government is doing the exact opposite, and accelerating this tax-based transfer to foreign hands.

A nation that systematically taxes its own citizens more heavily than competing foreign capital should not be surprised when more of its wealth, influence and economic future ends up beyond its borders.

The government's taxation policy is not just poorly conceived but brought to its inevitable conclusion it is simply economic treason.

@AngusTaylorMP @PaulineHansonOz @AlboMP @JEChalmers

[Lindsay David @linzcom]

Just the highlighted comment from Treasury below is enough to put the brakes on the entire economy.

[The Spectator Australia @SpectatorOz]

Anyone still cheering on Labor's Budget either hasn't read it - or doesn't understand it.

It is so destructive.

So idiotic.

And so economically incoherent...

That I predict Labor's days in government are numbered.

Most damning of all?

The hardest hit are actually the lowest paid.

Article | https://t.co/8M5d5f9nz5

[Lifewealth Group @LifewealthGroup]

not to mention the investor had already paid tax on the funds they have invested. While honest mums and dads probably can't do much about this and are going to get fleeced, if treasury hasn't modelled a change of behavior by the HNW community they are very naive.

[David McMahon @David_McMahon75]

Can we stop comparing a nurse earning $100k a year with an investor realizing a $100k capital gain? They aren’t remotely the same thing.

[Robin Dods @toy59496]

Article: ‘82 per cent more tax’: How CGT changes would hit most popular ASX stocks

https://t.co/9jPEuOr38k

Another excellent contribution by @chrisbrycki with thanks to @franks_chung and the https://t.co/DCnqICgFjX for publishing.

This isn't theoretical modelling this is back testing real data.

[Geoff Wilson @GeoffWilsonWAM]

Spot on Ryan.
@AlboMP’s CGT wrecking ball isn’t only bad policy, it’s economic treason against Australian aspiration.
No CGT. Simple taxes. Full deductibility. Low broad-base rates.
That’s what our Kiwi neighbours are offering while @ausgov drives capital, jobs and talent out of Australia.
Agree economic vandalism.

[Lifewealth Group @LifewealthGroup]

@Mappy6984 Don’t record people that don’t want to be recorded. Have some respect.

[David McMahon @David_McMahon75]

If you are a direct share investor, you will pay a lot more tax under Australia’s new CGT rules. How much more? See the chart below. This is a simulation of 50,000 20-stock portfolios held for 10 years under 3% inflation. Assume the investor is in the top tax bracket.

Each dot represents a portfolio. If the dot is above the blue dotted line, you pay more tax under the new system. The median portfolio in this study has an effective tax rate of 55% but as you can see in the chart many would pay a lot more.

[Robin Dods @toy59496]

Mandatory Loss Ordering : The Devious CGT Rule That DOUBLES Your Taxation

As if it couldn't get any worse...

An excellent article this morning in the AFR which explains that the Budget now imposes MANDATORY loss ordering of gains against losses.

https://t.co/2jAQI6aLMN

What does that mean?

It means effectively that the government is going to potentially confiscate half of your taxable loss under the new system because you MUST offset it FIRST against any gains from pre-2027 shares that had a 50% CGT discount. Confiscating half of your taxable loss means DOUBLING the tax on your gains.

Again you are particularly screwed with your own portfolio of shares relative to an ETF.

To explain: under the previous rules, capital losses could be applied against whichever capital gains produced the highest taxable income.

The new CGT legislation forces losses to be applied against older gains first- typically gains eligible for the 50% CGT discount.

This diminishes the value of capital losses because they are consumed against partially-taxable gains (because of the 50% discount) instead of fully-taxable gains, increasing tax payable despite no change in the underlying economic outcome.

In the worst case it doubles your taxation. Doubles!!! That's a 100% increase in tax.

I provide a worked example in the image.

This rule is above and beyond all the other problems with the new CGT tax system. And it's hidden....

@DerekFranc90653 @cjoye @tax_oz