Chris Bowen had previously gone on the record using the comparison of a nurse and a retired shareholder to highlight the inequitable scenario in a bid to sell the proposal to end cash refunds for excess dividend imputation credits.
“A nurse who earns $67,000 a year we charge $13,000 in tax. But a retired shareholder who has $67,000 in income we charge her zero tax and then write her a cheque for $27,000. That is not OK,” Mr Bowen said.
After receiving criticism from the tax profession, including an in-depth analysis by TaxBanter senior tax trainer Robyn Jacobson, Mr Bowen has now sought to clarify his calculations.
According to Mr Bowen’s new figures, the refundable tax offset, representing the refundable franking credit, is $28,700, not $27,000, based on a grossed-up dividend of $95,667 (i.e. cash dividend of $66,967.90). Using a yield of 5 per cent, this is a capital base of $1,339,333.
Ms Jacobson said this assumes that the SMSF is wholly in pension phase and none of the members exceed their $1.6 million transfer balance cap.
She said that Mr Bowen’s original remarks were ambiguous and misleading and that she was grateful for the clarity on the figures.