James Wrigley

So the effective tax rate on a capital gain for an asset that's been owned for more than a year becomes 10%.

Those rates were already fairly low relative to our marginal tax rate system anyway.

But when we now enter a world where

capital gains going forward after the indexing comes in in July 2027, if your future gains are going to be taxed at a minimum of 30% over and above inflation, 99 times out of 100, that capital gain tax that you'll pay in the super fund is going to be significantly less than you would be paying in your own name.

And it gets even better when you're in the pension phase, when you're starting to draw down on your money, subject to that transfer balance cap of what will be $2.1 million, you end up in tax-free earnings.

Yeah, the difference being the asset that's outside of super, the cost base will be indexed with inflation.

So your asset inside of super is not being indexed with inflation.

It's just this flat 10%.

But the asset outside of super will be indexed with inflation.

So the only way that you...

The only way that you would pay less tax in your own name is if your investment wasn't terribly good in the first place, that it was only just going up with inflation.

So if it's only just going up with inflation or slightly more, then the 30% tax rate of something that hasn't really gone up in value is zero.

Whereas that same asset, if it was in your super fund, only earning an inflation-type return, well, you're going to still have your 10% tax to pay.

But assuming it's a half-decent investment that's generating a return over and above inflation, you're better in the super world than outside.

Yeah.

So I don't think anyone was borrowing money in super to buy a residential property, a commercial property, regardless of whatever the type of property that they would buy.

I don't think anyone was really doing that for a negative gearing benefit.

And it really comes down to your super fund, worst case, is only paying 15% tax.

And so that negative gearing benefit is only worth 15% in your super fund, whereas a

To you in your own name, it was potentially worth 47% if you were a top marginal tax rate earner.