Mixing family and finances can throw up unexpected complexities. Personal finance expert and author Noel Whittaker has taken a look this week at questions from two Starts at 60 readers about their family-finance conundrums.
Q: Can I add four young members of my family to my self-managed super fund so that the franking credits can be used to pay their contributions tax?
Yes, the May Budget included a rule change at that allowed self managed superannuation funds to have six members. Therefore, adding your employed family members would enable the 15 percent contributions tax on their contributions to be offset by your funds franking credit income.
Q: My 92-year-old mum wants to gift her offspring with a sum of money each. What are the tax implications of doing so?
There is no gift duty in Australia, and your mother is free to gift whatever she wants. Of course, there could be tax implications for the recipients of the gifts depending on how they invested the money.
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