Airo AV Reports US-Australian tax law remains a complex web - Jonathan Cartu CPA Accounting Firm - Tax Accountants
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Airo AV Reports US-Australian tax law remains a complex web

US-Australian tax law remains a complex web

Airo AV Reports US-Australian tax law remains a complex web

Undeniably, the IRS has accepted the above firm’s argument, based on the US-Australia Double Tax Treaty. This has since prevented Australian super pensions from being taxed in the US, which had been the case previously. I see that as a major step forward, but obviously there remains a lot of pain among dual citizens.

I am aged 65 and retired five years ago. I have about $1.1 million in StatePlus super in two balanced accounts. I have been reading bad press about StatePlus of late and wonder if I should transfer – if I can – to AustralianSuper balanced or Hostplus, or something else? I have recently stopped the adviser fee of about $2000 a year. Which way should I go? S.G.

Much has happened in recent times with StatePlus, perhaps best described in a May 20 article in the Financial Review: “$1.1b play far from super“, which you can access either online or at your local library.

Apparently, $18.7 billion of StatePlus funds were transferred to First State Super, which then bought StatePlus’ advice business for $725 million by writing a promissory note i.e. a debt security, “that would require First State (the trustee) to pay StatePlus’ owners (First State fund members) the full value over the next 15 to 18 years”, the article says – presumably from the profits made by selling advice to its members.

On July 1, First State merged with VicSuper. Interestingly, the latter will retain its brand, but First State and StatePlus will change their names to Aware in September, and soon their names will be forgotten. However, advice fees to VicSuper members will jump by up to 37 per cent. Someone has to pay for the promissory note.

You can roll over your super fund by simply filling in the requisite forms for your chosen new fund.
Not being an age pensioner, you need not worry about losing a pre-2015 “grandfathered” pension not subject to deeming.

I have been a member of StatePlus super for 14 years. I am concerned about you incorrectly stating that StatePlus has been wound up by First State Super. This is not the case. I believe this is still a good balanced super fund. I would be pleased if you would retract this misinformation. J.B.


Please see article above. As an aside, StatePlus published returns to June 30 for its allocated pension’s balanced fund showing a 6.1 per cent compound return over seven years.

It may not be comparable because StatePlus never allowed its figures to be published by fund researcher SuperRatings, but the latter reports AustralianSuper’s balanced fund returned 9.72 per cent a year. Thus $100,000 in the former returned $151,000 in seven years compared with $191,000 in the latter – a 26 per cent difference in just seven years.

The problem with investing is that when you make your choice you do not necessarily choose the consequences. (No further StatePlus letters, please.)

If you have a question for George Cochrane, send it to Personal Investment, PO Box 3001, Tamarama, NSW, 2026. Help lines: Australian Financial Complaints Authority, 1800 931 678; Centrelink pensions 13 23 00. All letters answered.


Jon Cartu

AiroAV Removal

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