A plain English Guide for Share and Property Investors
by N E Renton (Wrightbooks, 2nd Edition, 2005)
It also covers in some depth the major legislative initiatives of recent years which many people find confusing, such as the various changes to capital gains tax and the introduction of the goods and services tax.
Topics such as family trusts, deductions, rebates, social security, tax reform and income splitting are all dealt with. The tax treatment of negative gearing, of dividend reinvestment plans, and of unit trusts is also discussed. The Treasurer's hoax involving the 1999 CGT changes is exposed.
The book also examines the ramifications of the dividend imputation system for investors, family businesses, listed companies, security analysts and the community at large.
The text of the second edition includes a new chapter on the tax aspects of investors making donations or bequests to charities, both directly and through listed companies.
Also added for the first time are selected tax questions asked by investors who are involved with family trusts and comprehensive answers to these. These real life case studies will help to flesh out this important subject.
There have also been an astonishing number of legislative changes of relevance to investors in the three years since the previous edition in 2002. The book therefore now deals with issues ranging from family trust elections to new rules governing franking accounts and corporate taxation.
For light relief the book even includes a collection of tax jokes.
With a detailed Glossary, a very comprehensive Index and a Foreword by Peter McDonald, National Director, Taxpayers Australia Inc.
440 pages 9780731402212 RRP $A29.95
A READER WROTE:
"I recently purchased one of your books, Income Tax and Investment.
"In Appendix A, there is a table of tax rates for individuals. However, this is nothing like the tax rates published by the ATO."
The author replied:
"Thank you for your interest.
"Yes, you are quite right. You should address your complaint to the authorities, who like to give a misleading impression of their own legislation to people who do not read its fine print.
"See the first page of the Appendix."
by Des Sandercock
What a daunting challenge when you consider we are talking about thousands of pages of legislation, expressed in convoluted paragraphs with a maze of cross-references, accompanied with rulings, regulations, case decisions, etc.
As an example, the author points out that in 1976 the tax return of individuals with investments consisted of four pages. By 2001 it consisted of 12 pages and the basic instructions in the Tax Pack and its Supplement ran to 204 pages, with reference to a further 81 separate publications and rulings.
The following quotes from the book are appropriate:
Well, who is the brave author? Mr Nick Renton, a Member of the Order of Australia, is a consulting actuary, commercial arbitrator, company director and writer. He has written a number of books on investment, on family administration matters, and on topics associated with good writing, and he has also published numerous articles in newspapers and financial journals. He has won awards for his works.
The objective, as set out in the Foreword, is to explain, in simple language, the Australian tax system, from the special perspective of the small or medium-sized investor. The author has deliberately concentrated on broad principles rather than on fine detail, and comments that while detailed knowledge can be left to tax practitioners, all serious investors should at least understand the basic principles.
Mr Renton has dedicated the book to his dear wife and children, who are no longer tax deductible.
While the depth of coverage varies, there can be no questioning the breadth. The book comprises 35 chapters, covering it seems every situation affecting the target readership. It also includes a postscript, a tailpiece, 7 specific numerical examples, 17 appendices, a glossary and an index. The text itself has, where relevant, numerical examples, case studies, and references to further information.
Some features of the book are:
Mr Renton cautions that many factors have to be considered when making sensible investment decisions. Tax has to be considered, but it is only one of the factors, and is not the start and finish of rational decision making.
The book is not without humour; each chapter begins with a quote, for example:
I enjoyed the answer to the question: "How many tax advisers does it take to change a light bulb?" You have to read the book to find out.
In my opinion, Mr Renton has achieved his objectives for the book. It is indeed a Plain English guide for shareholders and property owners, and covers virtually every type of investment. The table of contents is structured to make it easy for the reader to find a topic or sub-topic of particular interest.
The book is even-handed, giving praise where it is due and criticism where it is warranted. It also clarifies some misconceptions held by taxpayers.
Readers will certainly be in a better position to discuss the basics with their advisers, but, as Mr Renton points out, the book is not a substitute for detailed professional advice.
Chapter 01 INTRODUCTION
Chapter 02 INCOME TAX AND TAXPAYERS AT LARGE
Chapter 03 INCOME TAX AND INVESTORS
Chapter 04 CAPITAL GAINS TAX: BASICS
Chapter 05 CAPITAL GAINS TAX: SPECIAL SITUATIONS
Chapter 06 CAPITAL GAINS TAX: OTHER ASPECTS
Chapter 07 DEDUCTIONS AND REBATES AVAILABLE TO INVESTORS
Chapter 08 TAXATION WHEN BORROWED FUNDS ARE USED
Chapter 09 FIXED INTEREST SECURITIES
Chapter 10 SHARES
Chapter 11 DIVIDEND REINVESTMENT PLANS
Chapter 12 LISTED AND UNLISTED UNIT TRUSTS
Chapter 13 LIFE INSURANCE AND FRIENDLY SOCIETY POLICIES
Chapter 14 PROPERTY
Chapter 15 FOREIGN ASSETS AND INCOME
Chapter 16 TAX LOSSES
Chapter 17 INCOME SPLITTING
Chapter 18 FAMILY TRUSTS
Chapter 19 MINORS
Chapter 20 PRIVATE COMPANIES
Chapter 21 SHARE TRADERS AND THE CGT
Chapter 22 TAX EFFECT PLANNING
Chapter 23 DIVIDEND IMPUTATION AND COMPANY DISTRIBUTION POLICIES
Chapter 24 DIVIDEND IMPUTATION AND THE COMMUNITY
Chapter 25 FRANKING ACCOUNTS
Chapter 26 THE GOODS AND SERVICES TAX
Chapter 27 CURRENT AND FORMER STATE TAXES
Chapter 28 SOCIAL SECURITY
Chapter 29 POLITICAL INTERVENTION: A CASE STUDY
Chapter 30 IMPUTATION: SOME THEORETICAL CONCEPTS
Chapter 31 SOME WARNINGS
Chapter 32 MISCELLANEOUS
Chapter 33 TAX REFORM
Chapter 34 QUESTIONS AND ANSWERS ABOUT TRUST TAX ISSUES
Chapter 35 GIFTS AND BEQUESTS TO CHARITIES
POSTSCRIPT: WHERE IS THE NATION HEADED?
Numerical Example 1: Franking for $100 gross Company Profit
Numerical Example 2: Franking for $100 franked Dividend
Numerical Example 3: A Normal Disposal at a Capital Gain
Numerical Example 4: A Normal Disposal at a Capital Loss
Numerical Example 5: The Removal of Indexation
Numerical Example 6: How Investors can be worse off under the 1999 Rules
Numerical Example 7: Choosing the best CGT Basis
Numerical Example 8: The compulsory Wastage of Capital Losses
Appendix A MARGINAL INCOME TAX RATES FOR 2004-05
Appendix B EFFECTIVE RATES OF INCOME TAX FOR RESIDENT INDIVIDUALS WHO RECEIVE FRANKED DIVIDENDS, 2004-05
Appendix C AVERAGE RATES OF TAX 2004-05
Appendix D THE DOLLAR ADVANTAGE OF FRANKED DIVIDENDS
Appendix E TAX SHELTERING FROM FRANKED DIVIDENDS
Appendix F YIELD CONVERSION FACTORS
Appendix G HISTORICAL COMPANY TAX RATES
Appendix H THE CONSUMER PRICE INDEX
Appendix I TAXATION OF DISTRIBUTIONS DISGUISED AS LOANS FROM PRIVATE COMPANIES
Appendix J THE CAPITAL GAINS TAX PAPERWORK MESS
Appendix K TAX SIMPLIFICATION AND SUPERANNUATION
Appendix L CASE STUDY: TAX STORIES IN THE MEDIA
Appendix M TAXING TRUSTS AS COMPANIES
Appendix N A LETTER TO THE IRS
Appendix O KEY DATES
Appendix P FURTHER INFORMATION
Appendix Q CAPITAL GAINS TAX CALCULATIONS FOR TAX RETURNS
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This page http://nickrenton.com/tsc.htm was last updated on 2009-06-18