I will leave a comment to Ed Steer's post later today. We are pre-empting. Ed Steer and yourself have it wrong, we always buy metal when we sell it to clients, we don't just sit on the cash, what is the use of that to a mint - we need metal, not money. If we get a big shift to allocated or pool allocated or selling of unallocated or collection of unallocated and our unallocated balances reduce to below our operational needs, then we will just reopen unallocated. I can't see that happening, particularly the selling. Our clients are buy-and-hold. Not sure we said we have storage constraints, closing unallocated is not about storage contraints. We didn't want to do that because it was only the additional metal that was costing us, not the existing unallocated, so why penalise existing clients. That is why we decided to introduce pool allocated, which is really just unallocated with fees.
Nope - the 15% tax on your contributions and the 15% "CGT" on the increase in value of your PMs are two totally separate taxes and you'll pay both.
I'm going to have to check with an accountant on this - as far as I was aware capital gains in a super fund were taxed at 15% for <1 year holding, and discounted to 10% if disposed of after holding for longer than a year. I've only just started my SMSF and have not been through the first annual audit.
GP - you may very well be correct on this point, i.e. that the rate of CGT may only be 10% as opposed to 15%. However, i'm sure about the fact that no "CGT event" needs to occur in a super fund holding PM's ... phantom gains are taxed at the rate - whatever that is (10% or 15%). Will appreciate your feedback on this once you find out.
It's as a result of the "painful" process i went through recently of having to complete doco etc for the tax return of my SMSF. I could not understand why i was being asked for the value of my PMs as at 30 June 2010 ... The answer i got as well as the answers to my questions thereafter was a lesson in understanding just how unfair our tax "system" can be... Paying REAL MONEY for "taxation" on phantom profits really took the cake as far as i am concerned... but thats unfortunately the ugly reality. Like i said i'm not 100% sure of what rate of tax would be charged, whether its 15% or 10% - but i'm sure GP will get back to us on that one
OK, so storage space is not the problem. It's just that the Mint wants to make more money from its customers for holding the unallocated metal because the working stock is already 100% funded. (That's not a complaint or accusation, just an observation). So, storage of these 1000oz bars will be at the mint then and not in some 3rd party vault? Those sniffles are starting to dry up, thanks.
Gino, yes good summary. No we don't like holding metal with others, we have total control over our vaults.
yep. actually went (spot - x) as this is what it would be worth if i liquidated it at a dealer... so the best one can do is to get the crappiest price you can find for buyback from a dealer and use that to work out the value for the purposes of paying this CGT
I'm having a hard time finding any information on this. Googling "paying cgt on unrealised gains" already brings this thread up on the first page of results :/ Haven't spoken to an accountant on this, but my gut says there's been a mistake made - superannuation is pretty clear that CGT on the sale of assets held for less than a year is 15%, held for more than a year is 10% (because of the one third discount). How there could be "as you go" CGT on unrealised gains within this structure is beyond me. Got a feeling that the accountants/auditors treated the increased values of your PMs as a realised gain, not an unrealised gain. I'd be going back and asking plenty of questions - especially how being taxed on an unrealised gain reconciles with the discounted 10% CGT for holding an asset for more than 12 months before disposing of it. I take it you're both still in the accumulation phase and there's no pensions being paid out?
That's a nice political answer. So the mint will be holding some metal in these allocated pool accounts elsewhere then. Is that correct?
My brother says this is incorrect, he will ask his other CA buddies at work tomorrow. For the above to hold true, my brother says to me. Just go find the legislation and present the evidence that this is required. Hence, I believe if no CGT event occurs, there will be no tax until the sale (disposal) of the asset. AFAIK, people that hold investment properties do not pay CGT until the sale of that asset. Properties have been going up for the last 10 years, I havn't heard of a person required to pay tax year after year because of paper gains and valuations on it. You can perfectly hold an investment property in a SMSF as well. Slam
Folks.............. Get OUT of the SYSTEM any way you can. You play by the RULES set by the MAN. Can you understand the rule book? Know where the goal posts move to? How many hoops must you jump thru to play by the rules? Who is the umpire? Invest your fiat $ into something only you control. Enjoy your travels...........
Bit hard when you're under retirement age That's why I'm getting out of retail fund land and doing SMSF so I CAN get out of fiat.
Yes - definately still in the accumulation phase. I will try to get some more feedback and will post here when i know more...
You are on drugs. Please stop spreading disinformation. It took you approx 10 posts here to say the same thing, which was incorrect each time. http://www.ato.gov.au/download.asp?file=/content/downloads/n71606-06-2009_BW.pdf Pages 6 and 7. ... Which in turn references my original link, in determining if a CGT event has occurred or not. Please post your evidence to the contrary.
