'Any single share investment held in a single fund will grow "tax free". You simply cannot isolate financial outcomes by physically separating them into different funds. Indeed, you don't want that: the franking credit from your share income will pay the tax for the interest income on your cash holdings. That will happen irrespective of whether the two classes are held in different funds or not.'
Thanks Mongrel, your thoughts are appreciated!
I guess to a large extent it depends on how often one churns the shares. If one had a 50/50 split between shares and cash holdings and shares on average changed one a year ( but having held them for over a year) , that would create a 5% cgt on any profits. Or 7.5% if held for less than a year. A 5% reduction over a number of years would be a reasonable difference over the longer term. Clearly 7.5% would be a greater impact.
If all the shares were just in a Pension fund then there would be zero CGT.
As far as franking credits go, this would depend on the amount of same. A lot of blue chip type shares are paying well above the cash rate, so the franking credit (tax free in the Pension funds) would be worth more than the taxable interest in the cash fund.
My thinking may be flawed an would appreciate your comments.
