Missed the boom? Quality properties can still appreciate

I am aged 54,employed,own my home and several small,paid-off apartments. I have about $1.7 million in superannuation. The apartments have not appreciated much over the years and appear to be missing out on the latest explosion in house prices. As I approach retirement,I wonder what to do with them. Would it be usual to sell them at a suitable time for capital gains tax (CGT) purposes and avoid all the hassles with tenants and property managers etc. when I retire? What would I then do with the proceeds,to keep my funds earning something better than bank term deposit interest rates? A.V.

You are fairly young for retirement,although you may have enough in assets to see you through.

Capital gains tax could be higher than if you wait to sell when you retire.

Capital gains tax could be higher than if you wait to sell when you retire.Kerrie Leishman

I do not have enough information to suggest whether you should keep or sell your apartments but,as a rule of thumb,unencumbered,quality properties in good locations increase in value over time.

The question you need to ask yourself is whether your units match that description.

You do not mention your level of income,but I assume you are in a high-income tax bracket,which means that,if you do sell,CGT could be higher than if you wait to sell when you retire.

Is there proper criteria for declaring bankruptcy before and after,and then avoiding liability or debt repayment? What are the rules and penalties? P.F.

Books have been written on this topic.

Generally,you can enter into voluntary bankruptcy by submitting aBankruptcy Form to the Australian Financial Security Authority,which manages individual bankrupts. Insolvent companies deal with the Australian Securities and Investments Commission.

Alternatively,a debtor can send you bankrupt through the court using a sequestration order.

Bankruptcy normally lasts for three years and one day. During that time,an appointed trustee manages your debts,income and assets and can sell certain assets to help repay your debts.

If you are having debt problems,you can talk to a free financial counsellor on theNational Debt Helpline on 1800 007 007.

You may be able to avoid bankruptcy with a debt agreement.

My wife and I,both aged over 70,each work about 10 hours per week. We have a Self-Managed Super Fund (SMSF) worth about $1.5 million. We started seeing a financial advisor for the first time,as we wished to be less involved with investing. We were advised to change the SMSF into a portfolio of wholesale unit trusts,rather than a managed fund. As there seems to be little publicity about the former,we wonder if you would enlighten us,in particular,if they are safe from fraud? P.C.

I am a little confused,as unit trusts and managed funds usually refer to the same thing – unless you are referring to a managed account. In the latter,an adviser controls the investment for a fee.

If you want to be less involved in investing,why run an SMSF when you could simply roll it over into a top-performing public super fund,such as UniSuper or AustralianSuper?

In the event of fraud in a public fund,the federal government can raise a levy from other funds to cover losses.

How can one tactfully change a financial adviser? M.M.

It is your money and your future so,while I appreciate your desire to be tactful,state your intentions and,if you wish,explain your reasoning. If you want to avoid a face-to-face confrontation,send an email or a letter.

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.

Most Viewed in Money