Stay of execution for bonds

taxation disclosure bonds money management treasury executive director

27 October 1999
| By John Wilkinson |

Friendly society funeral, education and income bonds have been granted a short reprieve from being taxed, and the industry is continuing to fight for tax-exemption.

Friendly society funeral, education and income bonds have been granted a short reprieve from being taxed, and the industry is continuing to fight for tax-exemption.

As reported in Money Management, these bonds were put in jeopardy by a Ralph Review proposal to change their taxation status.

Australian Friendly Societies association executive director Martyn Pickersgill says the industry is not happy with Treasury's response to its lobbying.

"While the announcement is slightly better than September ruling, it is not a satisfactory result for us," he says.

The new Treasury ruling makes bonds sold after November 30 subject to tax at the company rate, but only from June 30, 2001. Until then, income from bonds sold after the end of November will be exempt from tax.

Deferring the introduction of taxing these bonds from September is to allow the friendly societies to develop new disclosure documents for the products.

Pickersgill says the announcement only allows friendly societies five weeks to meet this requirement.

The friendly societies are also to pay tax on investment income earned on funeral and education bonds from July, 2001. Investors will receive imputation credits for the tax paid by the friendlies. The reasoning behind this move is to ensure tax is paid at the marginal rate for taxpayers.

Pickersgill says lobbying will continue with the Democrats and the Opposition as well as with the government.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 weeks 5 days ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

1 week 4 days ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

6 days 20 hours ago

Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equi...

6 days ago