Roger Perrett - Top 50 Financial Adviser Australia

Think #Div293 Tax Won’t Apply to You? Check this..

Most people assume Division 293 tax only affects the wealthy while many first learn about Div 293 when the ATO sends them a bill....just after they lodge their tax return.

If you receive a Div 293 notice, it’s already too late to reduce the tax for last year.

But with the right planning, you can reduce it in future years, which is why understanding this really matters.


🔷 Who’s at risk (often without realising)?
Div 293 is an extra 15% tax on concessional super contributions when you have a large income.

There are 3 common triggers:
1️⃣ High employment or investment income
2️⃣ A large bonus
3️⃣ A capital gain from selling property or shares

It’s often the one-off events that catch people by surprise.


🔷 When does Div 293 apply?
When:
Income + Concessional Super Contributions > $250,000

For example:
If you earn $224,000+ & receive 12% super from your employer, your combined total exceeds $250,000 & you will likely get an ATO letter.


🔷How it works:
+ Super normally taxed at 15%
+ Div 293 adds another 15%
+ But only on the contribution portion above $250,000

Examples with slides in the comments below
1️⃣ Income + super = $240K → No Div 293 as all contributions under $250K cap
2️⃣ Income + super = $260K → $10K contributions over Cap → Extra 15% x $10K = $1,500
3️⃣ Income + super = $300K → $30K contributions over Cap → Extra 15% on $30K = $4,500


🔷Strategies that don’t reduce Div 293
🚫 Negative gearing..
🚫 Splitting contributions with your spouse - helpful for other reasons, not this one..


🔷Ways to reduce Div 293 in future years
1️⃣ Additional super contributions
The tax can be managed with the benefits still outweighing the downside.

The two generic types:
#Concessional (tax-deductible)
= Salary sacrifice or personal deductible contributions
+ Can Reduce personal tax from 47% → 15% (or, from 47% → 30% when including Div 293)
+ Contributions still included in Div 293 calculations, so they don’t reduce Div 293
+ But still tax-savings overall

#NonConcessional (after-tax)
+ Investing inside super instead of personally
+ Reduces taxable income and can reduce future Div 293

2️⃣ Redirecting Family Trust income
If income comes through a family trust, directing income to a lower-income beneficiary may help you stay under the threshold.

3️⃣ Managing capital gains
+ Selling in a lower-income year helps
+ Shares can be sold selectively
+ Property is all-or-nothing, so timing matters


🔷 Other considerations
Using catch-up concessional contributions (up to ~$162,500 depending on unused caps) may still trigger Div 293 if your combined income exceeds $250,000 but the tax benefits can still be significant.


🔷How is the tax paid?
You can pay:
1️⃣ From your bank account
2️⃣ Via your super fund
Paying personally keeps more money invested in super if cashflow allows.


🔷 Want to avoid a Div 293 shock next year?
+ Plan early & reach out if you need a hand.

3 weeks ago | [YT] | 2

Roger Perrett - Top 50 Financial Adviser Australia

Discover How to Pick the Best Day to Invest to Increasing Wealth!


Investing in Tranches: A Smart Way to Enter the Market?
🔹 What does “investing in tranches” mean?
Instead of investing a large lump sum all at once, you spread your investment over several smaller amounts over time.

⬆️ Why do this?

Markets fluctuate. By investing gradually, you reduce the risk of buying at a peak.
If the market rises after your first tranche, you’ve already gained.
If the market dips, you can invest at lower prices later.


🔹 Benefits of tranche investing:
✔️ Smooths out entry points
✔️ Reduces emotional stress
✔️ Helps avoid timing mistakes

🔹 How does it work?
Example: You have $100,000 to invest. Instead of investing all today, you invest $20,000 monthly over 5 months. This averages your purchase price and reduces risk.

🔹 When is this strategy useful?

Large lump sums
Volatile markets
Long-term portfolios


💡 Tip: Tranche investing is not about predicting the market—it’s about managing risk and emotions.

✅ Want to learn more about smart investing strategies? Reach out today!

4 weeks ago | [YT] | 1

Roger Perrett - Top 50 Financial Adviser Australia

Get a Retirement Bonus! A Real Benefit or Marketing Gimmick?







🔹What is a ‘retirement bonus’?


It is where some superannuation funds partially refund unnecessary capital gains tax (CGT) that they have deducted.


To explain, superannuation has two (2) phases:



⬆️ 1. Accumulation – where money goes IN.


+ The capital gains tax is generally 10% if you have held the investment for greater than 12 months, otherwise up to fifteen (15%) tax.



⬇️ 2. Pension – where money comes OUT.


+ Say when you retire (or are aged 60 & ended an employment agreement)


+ There is zero (0%) capital gains tax on pension phase.




Some super funds do not deduct tax when moving from ‘accumulation’ to ‘pension’ phase.



Yet some super funds make you crystallise your capital gains when you move between the two (2) phases.


They make you pay tax (CGT) unnecessarily.


A “retirement bonus” is a partial refund of the tax (CGT) that was deducted unnecessarily from your super balance.





🔹How much is the bonus versus the tax you could have saved?


A typical bonus is 0.5–0.7% of your balance. On say a $500,000 balance, that’s $3,000.


If you’ve been in super for 30 years, your gains could be $250,000+, so say $25,000 in (10%) tax saved.


The difference could be a lot larger - if you have a larger balance!





🔹Which super funds actually pay a bonus?


There are three (3) scenarios:


1. Funds that Do Not deduct the unnecessary capital gains.
· BT Panorama & Hub24 etc



2. Funds that Deduct Tax & Partially Refund in the form of the ‘bonus’.
· AustralianSuper (Balance Booster)
· Aware Super
· Australian Retirement Trust
· Mercer Super, REST, & QSuper.



3. Funds that Deduct Tax & with No Refund or bonus. Ouch!
· Like Hostplus.





🔹What are the catches or eligibility rules for the bonus?



If your fund has a ‘retirement bonus’, they may require you:


✔️ To be a member for 12 months+


✔️ To NOT Transfer your balance to another fund.

✔️ To NOT Change your investments before moving to pension phase.





🔹What should you do?


I suggest reviewing your super & get advice, to potentially save getting over taxed.


If you are about to retire, it would be tragic if you missed out, because you broke some of these rules.


You may be able to start the pension & collect the ‘retirement bonus’, then move to your desired super fund.


Saying this, you may stay with your current fund if the life insurances are important to you.





🔹What if you have a SMSF or a fund that doesn’t charge the capital gains tax unnecessarily?

A similar concept applies.



If you sell investments while in ‘accumulation’ phase or just before you retire, your super fund will need to pay tax (CGT).



If you move to pension phase first, you can save this tax (CGT).

Timing is important.




PS. Please reach out if you would like to discuss your bonus! 💰💰

1 month ago | [YT] | 2

Roger Perrett - Top 50 Financial Adviser Australia

Achieve Strong Investment Performance Without Choosing a Single Share!

Your choice of investments will make a massive difference to your retirement outcome.

There are two (2) common approaches index investing and active management, and they both work very differently.

Here is a simply way to break it down:

1️⃣ Index Funds (or Tracker fund)


These invest in every company within a chosen index.

For example, the ASX 200 is an index with the largest 200 companies on the share market in Australia.

Because index funds simply replicate the index, they do not need teams of people researching which shares to buy, sell and hold.

They simply buy every share in the index.

As such, they are usually lower cost.

When markets are rising, index funds can capture broad market growth very effectively.


2️⃣ Actively Managed Funds

Active managers do not invest in every company in the index.

They have teams of analysts making decisions on which companies to invest and which companies to exclude.

Their decisions are based on research, themes, or market conditions.

They have analysts reading through company reports, interviewing CEO’s and they seek to understand the business and industries thoroughly.

As such, active funds generally are higher cost to pay for these teams and the research.

To highlight the differences in approaches, during COVID an Active Manager might have chosen:

✖️To avoid buying Qantas because the planes were not flying and on the tarmac.

✔️Instead invested in CSL, which is a company that was involved with the COVID vaccine.

Whereas an Index fund manager would have invested in both Qantas and CSL because they are both in the ASX200.


So which investment style should you choose?

The key point is this:
👉 Both styles have strengths.
👉 Both have weaknesses.
👉 We often use a combination to diversify our client’s investments.

Your investment style isn’t about “winning” it’s about choosing the approach that aligns with your goals, risk tolerance and the way you prefer your money to be managed.

Please reach out if you would like advice on what is best for you.

____
PS. We help people have a great retirement lifestyle. ✈️ To see how you are placed, you can complete a quick 3-minute self-assessed scorecard. You will receive a free personalised report, that will instantly provide actionable steps, to ensure you are ready for the Time of Your Life! 👇
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1 month ago (edited) | [YT] | 1

Roger Perrett - Top 50 Financial Adviser Australia

We all need to pay Tax, but there is no need to leave a Tip!

Tax is important for the betterment of society.

In this video I discuss that JUST paying the required tax, is essential for building wealth and living your best life!

The less tax you pay:
✅ The longer your money lasts,
✅ The better your lifestyle now and in retirement,
✅ Plus, the more you can pass on to your loved ones

The challenge is.. tax rules are complex and are always changing.

Here is our well proven 5-step ‘SMART’ framework for smarter tax outcomes.

🔹 1. Strategy First, Tax Second

Start with your goals and create strategies to achieve these goals.

Strategies often have secondary benefit of reducing tax, so be wary of implementing a strategy purely to save tax.


🔹 2. Move to Lower Tax Rates

Generally, we need to shift from paying 45%, to 0% in retirement.

This could be achieved by using different structures with lower tax rates, perhaps deferring tax or, contributing to super.

Strategies can take time, so we should start early.


🔹 3. Assess and Consider Everything

Often strategies that provide a tax savings, can have other restrictions.

For example, superannuation is great for tax savings but access to the monies maybe restricted.

It is important to consider everything.


🔹 4. Rules – Play By Them

Strategies consider tax & in many cases save you considerably money.

However, never break the rules.


🔹 5. Talk to Specialists and Obtain Advice

Tax laws are complicated and often change.

It is important to receive regular advice that is personalised for your situation.

Plus, receive advice from experienced tax specialists, who regularly recommend similar strategies, for clients in similar positions.


With tax returns soon due (31st October), it is a good reminder to review your goals and strategies.


PLUS, Use our ‘SMART’ framework, so you do not have to pay a tip!


PS. Please ‘like’ if this is a good reminder! 🙂

P.P.S. If you are thinking of your goals and retiring in the future, please reach out. We help people have a great retirement lifestyle. ✈️ You can also complete a quick self-assessed scorecard, and you will receive a free personalised report, that will instantly provide actionable steps, to ensure you are ready for the Time of Your Life!
👇
lnkd.in/gc4R_N4M

3 months ago (edited) | [YT] | 1

Roger Perrett - Top 50 Financial Adviser Australia

What Investors MUST Do Now, When Share Markets BOOM!

The S&P500 is up 15.88% for 12 months & 116.3% over 5 years.

Yes, it has doubled over 5 years!

The challenge is what to do when share markets boom….. 💥

The 4 options are:

🔹1. Sell everything

There is a famous saying by Peter Lynch “Far More Money Has Been Lost By Investors Preparing For Corrections, Than Has Been Lost In Corrections Themselves.”

No one can time the market on a consistent basis.

The S&P500 index is up 834% over 30 years so if your portfolio is for long-term monies, it is important to stay invested.

I wouldn’t be selling everything if these funds are for the long-term, unless you need the money.


🔹2. Buy

You can buy now if the portfolio suits your timeframe & you are comfortable with how often & how much, the portfolio can go down in value.

You need to be able to still ‘sleep at night’ & definitely not sell when the market ultimately corrects.

I believe it is often a good idea to instead of investing everything today & hoping today was a good day - invest in tranches.

Perhaps invest:
1/3 now,
1/3 in a months’ time & the last
1/3 in two months’ time.

This means you can always feel good. 😊
⬆️If the market goes up, you can be pleased that you invested some when the market was lower.
⬇️If the market goes down, you can be happy that you can take advantage & add money at lower levels.


🔹3. Do nothing

If you simply do nothing & don’t take any profits, your portfolio will end up with a larger & larger exposure to shares.

As an analogy, imagine planting a well-balanced garden but if you don’t do anything, over time the faster growing trees will get larger & larger compared to the shrubs.

The trees will get too big.

This is like a portfolio, if you don’t touch a diversified portfolio of say 70% shares & 30% defensive, eventually the shares or growth assets will outperform or grow faster than defensive assets, resulting in a riskier portfolio.

You may end up with say 80% shares & 20% defensive assets.

So, I would be wary of simply doing nothing.

Instead I would consider …


🔹4. Rebalancing

There are three (3) options to rebalance to stay aligned with your risk profile over time:

1. Selling the overweight assets & buying the underweight.

2. Instead of reinvesting income, use the income from the overweight assets to invest in the underweight asset.

3. Use new money to buy the underweight asset say from regular super contributions or if you have additional money to invest.


When the market booms or has a correction, remember what Warren Buffett says, ‘do not jump off a perfectly good ship’. 😊


P.S. If you are thinking of your investments, please reach out. We help people have a great retirement lifestyle. ✈️ You can also complete a quick self-assessed scorecard, & you will receive a free personalised report, that will instantly provide actionable steps, to ensure you are ready for the Time of Your Life! 👇
lnkd.in/gc4R_N4M

3 months ago | [YT] | 1