Research the best strategy to suit your goals

MY WIFE and I, aged 71 and 67, are planning to retire next year. I would ver y much appreciate some basic clarifications regarding Centrelink’s treatment of super and bank deposits.

Would we receive a higher pension if our money was left in our super or put into a bank fixed-term deposit?

For the purposes of eligibility for the age pension, it does not matter whether the money is held in superannuation or in bank accounts because both will be subject to the deeming rates.

It’s really a matter of taking advice as to what strategy will give you a return that fits your goals and your risk profile. I PAID capital gains on a property sale this financial year but have heard I could have avoided capital gains tax if I had rolled the proceeds into super. I am 68. Is this correct if I work for a short while to become eligible to contribute? Can I amend my tax return if needed?

It is not possible in this country to avoid capital gains tax by rolling the proceeds of the sale into superannuation.

However, as capital gains tax is assessed by adding the net gain to your taxable income in the year the sale contract is signed, it is often possible to reduce the impact of capital gains tax by simultaneously making a deductible contribution to super.

However, the contribution must be made in the year the capital gains tax is triggered.

You say the sale was made in this financial year, so if you can pass the work test, which involves working 40 hours in 30 consecutive days, you should be eligible to make a contribution to super of $25,000 and claim a tax deduction. Make sure you talk to your accountant first because it’s important to get this right. Keep in mind that deductible contributions incur an entry tax of 15 per cent.

You mentioned the possibility of amending your tax return; if the sale took place in the current financial year it would be most unlikely your tax return would be done by now. MY QUESTION is regarding CHESS statements. What length of time should I retain them? I was advised by an accountant that I should retain CHESS statements until my shares are sold. I bought shares in CBA, WBC and a few other blue chips 14 years ago and have full participation and have not sold any shares. Apparently, by the end of 2018 CHESS will offer statements electronically.

‘Would we receive a higher pension if our money was left in our super or put into a bank fixed-term deposit?’

CHESS (Clearing House Electronic Subregister System) is the computer system used by the Australian Securities Exchange (ASX) to record shareholdings and manage the settlement of share transactions. My broker tells me there should be no need to keep CHESS statements.

Your sponsoring broker should be able to provide a portfolio summary with all CHESS holding at any time. Noel Whittaker is the author of Making Money Made Simple and other finance books. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: noel@noelwhittaker.com.au