Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Advance

The term "Advance" refers to Advance Asset Management Limited ABN 98 002 538 329, AFSL No. 240902, a wholly-owned subsiduary of St.George and a member of the St.George Group.

Advance Managed Fund(s)

The term "Advance Managed Fund" refers to the managed funds forming part of the Advance Alliance Investment Suite and the Advance Alliance Wholesale Investment Suite, as well as interests in the Advance Sharemarket Fund, Advance Index Funds and Advance Cash Management Fund and the term "Advance Managed Funds" refers to all of these funds collectively. Advance is the issuer of interest in the Advance Managed Funds.

Advance Products

The term "Advance Products" refers to the Advance Managed Funds and the Advance Super Products.

Advance Super Products(s)

The term "Advance Super Product" refers to each of the Advance Retirement Suite, Advance Retirement Savings Account, Advance Personal Protection Package and Advance Pooled Superannuation Trust and the term "Advance Super Products" refers to all of these products collectively. Asgard is the issuer of interest in the Advance Super Products.

Allocated annuity

A superannuation income stream similar to an allocated pension but offered by a life office, rather than paid from a super fund.

Allocated pension

A type of income stream paid from a super fund. The income stream can be varied each year within government-prescribed minimum and maximum limits. Your pension payments are a mixture of investment earnings and the return of your original purchase price. You can buy an allocated pension only with eligible termination payments that are unrestricted 'non-preserved'.

Annuity

An income stream that pays a regular income either for a fixed term (usually called a 'term certain' annuity) or for life. An annuity can be purchased with ordinary (i.e. non-ETP) or superannuation (ETP) money. A complying annuity is a special type of annuity that complies with specific conditions that enable you to qualify for the pension RBL.

Approved early retirement scheme

A scheme approved by the Australian Taxation Office where the services of employees of a particular age and/or occupation are terminated to enable reduction in the employer's operation or replacement of these employees with younger employees. Payments made under an approved early retirement scheme are treated for tax purposes in the same way as bona fide redundancy payments.

Asgard

The term "Asgard" refers to Asgard Capital Management Ltd ABN 92 009 279 592, AFSL No. 240695, a wholly-owned subsiduary of St.George.

Assessable income

The amount of income that is assessed for taxation, before any tax deductions are taken into account. Assessable income includes your regular income (such as salary) plus other amounts specifically included in the Income Tax Assessment Act (such as capital gains and ETPs) but not including income exempted under the Income Tax Assessment Act.

Australian Financial Services Licence (AFSL)

AFSL is a licence granted by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001 (Cth) (Corporations Act) which permits the holder of the licence to provide specified financial services in accordance with the Corporations Act and any applicable licence conditions. The AFSL replaces licences issued under the old regime, such as securities dealers licences and investment advice licenses.

AWOTE

Average Weekly Ordinary Time Earnings is a measure of wage and salary levels of employees in Australia. Used to index various dollar thresholds such as your RBLs.

B

Bank accounts debit tax (BAD)

A State and Territory Government duty imposed on withdrawals from bank, building society and credit union accounts and cash management trusts with a cheque facility. The NSW Government abolished this duty on 1 January 2002. It is due to be abolished in other states and territories on 1 July 2005.

Beneficiary

A person entitled to receive income and capital distributions from a trust and for whom the assets of the trust are held on behalf of the trustee, or a person entitled to receive a benefit from a superannuation fund if you die while still a member of the fund.

Benefit

A broad term used to describe a super entitlement that is paid to you and/or your beneficiaries. It can be in the form of a lump sum or a pension or annuity.

Bona fide redundancy payment

Money paid to an employee who has been laid off because his/her services are no longer required. Part of such a payment, based on the number of whole years service with the employer, is tax free, not counted for RBL purposes and cannot be rolled over. For a redundancy payment to be 'bona fide', certain conditions must be met, essentially to ensure that a particular position is terminated and not filled by another person.

Brokerage

Another name for Commission.

C

Capital gains

The increase in the value of an asset, such as shares or property, over its cost price. If the value at a particular time is less than the cost price, a capital loss has occurred. Capital gains can be ‘realised’, when an asset is sold, or ‘unrealised’, when an asset has increased in value but has not been sold.

Capital Gains Tax (CGT)

Tax on the increase in value gained on the disposal of assets such as shares and property, less any applicable capital losses.

Capital loss

The difference between the value of an asset and its reduced cost base, where the value is less than the cost. Capital losses can be "realised", when an asset is sold or "unrealised", when an asset has decreased in value but has not been sold.

Cash management trust

A pooled investment vehicle providing investors access to the professional money market. Cash management trusts invest in highly liquid investments, such as Bills of Exchange, Promissory Notes and Government and Semi-government bonds, generally with a maturity of less than six months.

Commission

Commission or brokerage may be paid to your financial adviser by the financial institution you invest with. Commission may be either "up-front", and deducted from the entry fee you pay on your investment, or "ongoing" and deducted from the ongoing management fees of your investment.

Commutation

The process of converting all or part of your income stream to a lump sum.

Condition of release

An event that entitles you to take your benefits from a super fund as a lump sum or income stream, such as retirement or attaining age 65.

Contributions surcharge

An additional tax on employer, personal tax-deductible super contributions and certain amounts of employer ETPs levied on high-income earners.

Contributions tax

A common term that describes the tax that a super fund pays and deducts from your employer and personal tax-deductible superannuation contributions and any untaxed post June 1983 components rolled over.

Consumer Price Index (CPI)

The 'All Groups Consumer Price Index' is a measure of the inflation rate. It is based on the prices of certain goods and services and represents changes in the cost of living. It is used to increase various payments and thresholds in the super system, to ensure they keep pace with the cost of living.

Cost base

The amount you can deduct from the proceeds you receive when you sell an asset, to work out whether you have made a capital gain. Usually, your cost base is made up of what you paid to purchase the asset, any non-capital costs of ownership of the asset, any capital expenditure incurred to increase the assets in value, any incidental costs you incurred in acquiring the asset and any capital costs incurred in maintaining the asset.

See also Reduced cost base and Frozen cost base.

D

Deductible

If an expense or loss is "deductible", it means you are able to claim it as a tax deduction in your annual tax return.

Deductible amount

The annual tax-free component of a pension or annuity payment. It is calculated by dividing the undeducted purchase price less any residual capital value by the relevant number.

Deductible contributions

Super contributions that may be claimed as a tax deduction by the contributor.

Depreciation

Depreciation is the way in which the value of an asset is written down or reduced over its lifetime.

Dividend

The distribution of part of a company's net profits to shareholders, i.e. the income you earn for investing in shares.

Dividend imputation

The tax system under which franking credits, representing the tax paid by a company on its profits before paying dividends, are available to shareholders. Investors are taxed on the total taxable value of the dividend - the actual dividend received plus the franking credit - and may claim a tax offset for the amount of the franking credit. The dividend imputation system prevents the "double dip" effect which once occurred, where company profits were taxed once in the hands of the company and then again in the hands of shareholders after distribution as dividends.

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