Occam identified he was in pension phase in a smsf. "What...

  1. 6,369 Posts.
    lightbulb Created with Sketch. 281
    Occam identified he was in pension phase in a smsf.
    "
    What happens if I move my SMSF , which is in pension mode, into a managed fund , would I still get the benefits of franking credits ?"​

    This is the question asked in the thread. ​

    If he stays in his smsf, benefit of excess franking credits are lost. I think we have all worked that out already.​

    But in a pooled fund, the tax liability of the whole fund[which includes contribution tax] is set against the franking credits of all the fund members.​

    The important bit is that the pension phase members, are credited in the unit price , with the effects of their excess credits.​

    Hence getting the benefit of their excess credits. ​

    You can see the effect of this in the difference in the unit values for pension and accumulation members in the same fund.​



    AFR article​

    Mr McMahon rejected claims that people drawing a retirement income from an industry fund do not receive the full benefit of franking credits because those credits are used to minimise the tax liabilities of other members.​

    "AustralianSuper's crediting rate procedures ensure that the members' accounts are adjusted throughout the year to provide the accumulation and pension members their respective share of the full benefit of the franking credits," he said.​

    "Pension members are provided with their respective share of the full benefit of the franking credits through the crediting rate process."​
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.