Hi Sharky. My apologies for the typo, guess I should have gone to Specsavers. I fully understand your argument, it's a common misunderstanding. Perhaps my post was not clear enough so I will try again. A company is an abstract entity that represents its owners interests, both assets and liabilities. The 30% tax paid by the company is paid on behalf of its owners. The $60,000 franked income you referred to represents $85,714 of pretax income. Hence, the company has paid $25,714 of the shareholders share of tax, as opposed to $11,617 on a salary of $60,000. The rebate you refer to in a SMSF of $5,125 (I haven't checked this figure) means that the net tax liability is $20,589, almost double what would be payable on a $60,000 salary. If the owners opted to use a partnership or trading trust structure, the pretax profit distribution would be $85,714 and taxed at the taxpayers marginal rate. There is no doubt that our superannuation system provides an advantageous incentive to save and thereby reduces the pension liability of our welfare system. I am sure you will agree with me when I say I would hope that all Australians see this as a good thing and take advantage of it.
GRR Price at posting:
$1.56 Sentiment: Buy Disclosure: Held
(20min delay)