Hi Infose,
Woolworths pays a fully franked dividend of $70 to your investment company. This is grossed up to $100 taxable income, with a $30 franking credit.
Your investment company receives $100 in taxable income, plus the $30 franking credit.
The tax payable by your investment company on $100 is 30%, or $30. This $30 tax payable by your investment company is offset by the $30 franking credit so there is nil tax payable by your investment company.
Your investment company also retains the franking credits in it's franking account, so can pay franked dividends out to it's shareholders at a later date. If you wait to pay dividends until you individually have no other income, the marginal tax rate payable can be reduced to even lower than 15%, which is the tax rate paid by a superfund in accumulation. It depends on the size of the dividends paid out by the investment company.
You will get a better tax result on your first $1.6m being in super, as it's a nil tax rate on earnings from this balance once in pension phase. After this $1.6m though, it gets more complicated from a tax perspective, and you are also losing the freedom of being able to access your funds due to super legislation.
Cheers!
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