| package for the year just ended was $150,000 and this includes the standard superannuation guarantee contribution. In the last five years my salary has gone up by about 3.0% per annum and I think this rate of increase is likely to continue for the next five years. Im fortunate that my employer has large contracts with many of the major retailers who have largely been unaffected by the pandemic so my position is quite secure. FP: What about you Dianne? Dianne: I work from home as a freelance IT consultant and am aged 28. This financial year I had a taxable income from my business of $88,000. FP: Thats excellent, how is business for you? Do you see any change in your business income? Dianne: I do have a business plan. My business plan projects that I will earn taxable business income of $95,000 in the 2021/2022 year and then increase by about 5% per annum. As with Jack, my income is relatively secure as I have a number of Government contacts, though as I said earlier I get nervous about plans because so many things change but so far so good. FP: Dianne, Im impressed that you have a business plan in place, many small businesses dont, what about contributions to superannuation? Dianne: None Im afraid. I do have about $50,000 in the Bendigo Conservative Index Fund as a result of the various part time jobs I have done in the past. FP: Whilst we are on the subject of superannuation Jack how much do you have in super? Jack: My last statement from TWU Super showed a balance of $136,500. I think it is invested in a cash plus option. The only contributions that go in are from my employer as part of their Superannuation Guarantee obligations. A friend suggested that making non-concessional contributions to superannuation is much more tax effective than making concessional contributions. Im not sure what they mean by concessional and non-concessional contributions and Im not sure if their advice is correct can you help me out? FP: As I mentioned to Dianne earlier lets concentrate on gathering data during this interview and not get too side-tracked by these other issues. These are however very important issues and I will certainly address your concerns in my final report. Now, besides your house and your superannuation what other assets do youhave? Jack: I own a small unit in Caulfield that I lived in previously, it cost me $365,000 back in 2016 and is now valued at $540,000. I know that value is correct because the bank re-valued the property as part of our recent home purchase. I have a loan on the property of $292,000 which is an interest-only loan with an interest rate of 3.19% fixed for the next 5 years. The rental return from the property is $320 per week and this covers both the interest on the loan and the other costs associated with the property like insurance, council and water rates, etc. so I see it as a no- cost investment. In fact, my tax accountant says that whilst I break-even from a cash perspective, I generate a tax loss on my investment due to depreciation allowances of $4,000 per year which generates some tax savings for me. Dianne: I inherited 500 CSL Limited shares and 1,000 Wesfarmers Limited shares back in 2010 when my father passed away. Back then the CSL shares were valued at $35.00. I sold 100 of the CSL shares at $270.00 on 1 July 2020 to free up some cash which we have used to assist with the purchase of the house. I still have the other 400 CSL shares and the original 1,000 Wesfarmers shares. I guess I am going to have to pay some capital gains tax on the sale of the CSL shares. Capital gains tax has me very confused and whilst on the subject of confusion franking credits have me completely bamboozled. Can you give a simple and straight forward explanation of capital gains tax and dividend imputation maybe an example might help. FP: Let me add that explanation to my list I will explain both of these issues separately. | 
