Just bear in mind that your wife’s super is not assessable until she reaches pensionable age, unless she starts an account-based pension from her super.

You are regarded as a homeowner if you are living in your own residence. Any mortgage on that property is not relevant to the homeowner situation.

I have a son who has lived in Bali for 25 years and has a Balinese wife as well as a business there. What should happen about his Australian super? He is still making contributions to it. If he becomes an Indonesian citizen, can he still carry on with it and then have an income stream when he gets to retirement age? He won’t be getting an Australian age pension as his assets would be too high. Can his wife in Bali also have an Australian super fund to pay into?

A non-resident can be a member of an Australian super fund and make contributions.

It could be an issue with a self-managed super fund, as a non-resident member could mean that the fund ceases to be an Australian fund.

However, that should not be an issue with a mainstream fund.

Your son would need to supply a tax file number to the super fund, but whether he can claim deductions depends on whether he has income that is taxed here.

When he becomes eligible to claim benefits from the fund, taxation of them is likely to depend on Indonesian law.

In short, there is no issue in your son continuing to make super contributions but the daughter-in-law would probably need an Australian tax file number.

I suggest your son seek expert advice about taxation of the end benefits.

My wife and I are in our 30s, work full time and have a combined income of $215,000. We have a $430,000 mortgage on our home and a $240,000 mortgage on a townhouse valued at $350,000. The investment property breaks even and our tax savings are not high. My wife will stop working when our second child is born, so we are not realistically going to pay down all of our debt any time soon. I think we would be in a better position by selling the townhouse and putting the proceeds into our mortgage offset account, as this may outweigh any gains we could achieve by keeping the investment property. Do you agree?

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If the investment property has potential and it does not cost you any money to own, you may be better off to keep it. If you think it has no potential, by all means, get rid of it.

As a first step, I suggest you do a budget to decide if you could afford both mortgage repayments on one wage. The outcome of these calculations, as well as your assessment of the investment property’s potential, should enable you to come to the right decision.

I have several thousand dollars in capital losses and wondered if they lapse with my death, or can they be offset against capital gains as my home and share portfolios are liquidated before my estate is distributed? I’m trying to educate my sons, who are not financially literate.

Capital losses are lost upon death. Therefore, they cannot be used by the estate.

There is one exception. If you leave an asset that is not Australian property to a non-resident or tax-advantaged entity, then the capital gain is taxed in your personal tax return as if you had gifted it just before you died. In this case, the capital losses could be used.

Seek good advice from an estate planning specialist.

Noel Whittaker is the author of Retirement Made Simple and numerous other books on personal finance. noel@noelwhittaker.com.au

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