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

R

Reasonable benefit limit (RBL)

A limit on the amount of certain retirement benefits you can receive that are taxed at concessional rates.

These include super benefits - both lump sum and income streams, employer ETPs and the CGT-exempt component of an ETP arising from the sale of certain small business assets.

There is a lump sum RBL and a pension RBL. These are generally dollar amounts that are indexed each tax year. The part of any benefit you receive that is over your RBL is known as an excessive benefit.

Reduced cost base

The reduced cost base is used to determine the amount of any taxable capital loss you made on the sale of your units. It is calculated by adjusting if appropriate, the purchase cost for any return of tax deferred or tax-free income received before your units were sold.

Relevant number

The number by which you divide the undeducted purchase price less any RCV of an income stream investment to calculate the annual deductible amount.

It is based on life expectancy for allocated pensions and annuities and lifetime pensions and annuities, and on the actual term chosen for fixed-term or term-certain pensions and annuities.

Residual capital value (RCV)

A capital amount that can be paid back to you at the end of the term of your annuity (or on death).

Reversionary beneficiary

The person who you have nominated to receive your income stream automatically upon your death. Once nominated, a reversionary beneficiary generally can't be changed.

Rollover

The process of transferring ETPs into a rollover fund, superannuation fund, pension or ETP annuity. Rolling over allows for deferral of lump sum tax.

Rollover fund

An umbrella term used to describe investments such as Approved Deposit Funds and deferred annuities into which you can invest ETPs and other super benefits prior to retirement.

S

Salary sacrifice

A tax-effective arrangement in which your employer contributes to a super fund on your behalf instead of paying you the equivalent amount of gross salary.

Share

A proportion of the issued capital of a company. A company issues shares to raise the money required to finance its operations.

Shareholder

The owner of shares in a company. Being a shareholder gives you the right to receive dividends paid from the company, to share in the capital of the company if it is wound up and usually to vote in the company's annual general meeting.

St.George

The term "St.George" refers to St.George Bank Limited ABN 92 055 513 070.

St.George Group

The term "St.George Group" refers to St.George and its subsiduaries (which include Advance and Asgard).

Substantially self-employed

If you are self-employed but also perform some paid work, you will be 'substantially self-employed' if your eligible employment income plus reportable fringe benefits add up to less than 10% of your assessable income and reportable fringe benefits.

Superannuation Guarantee

The Superannuation Guarantee Administration Act (‘Super Guarantee’) was introduced in 1992 to make it compulsory for employers to contribute to superannuation for their employees. The minimum level of contribution is expressed as a percentage of each employee’s salary (8% in 2001/02 and increasing to 9% from 1 July 2002).

T

Tax Act

Comprises the Income Tax Assessment Act 1936 and the Income Tax Assessment Act 1997.

Tax deduction

An outgoing or expense that can be used to reduce assessable income. Generally, in order to be claimed as a tax deduction, an expense must have been incurred in the course of producing assessable income, or be specifically allowed as a deduction in the Tax Act.

Tax Office

Refers to the Australian Taxation Office.

Tax rebate or offset

An amount that reduces dollar-for-dollar the tax you have to pay. A tax offset can only reduce the amount of tax to pay and generally won't result in a tax refund (except for franking credits).

Taxable income

Assessable income less allowable tax deductions.

U

Undeducted contributions

Super contributions made out of your after-tax salary or on behalf of a spouse or child under age 18 that are not claimed as a tax deduction. These contributions aren't subject to contributions tax, are not taxed when withdrawn and don't count towards your RBL. There is currently no limit on the amount of personal or spouse undeducted contributions you can make.

Undeducted purchase price (UPP)

Your UPP represents the amount of the purchase price of a pension or annuity that may be returned to you each year as a tax-free deductible amount. If a deductible amount exists, it reduces the amount of your assessable income payments that count for tax purposes. The undeducted purchase price of a super income stream generally is the sum of the 'Undeducted Contributions', 'Post-June 1994 Invalidity' and 'CGT-exempt' components of the purchase price. The undeducted purchase price for a non-super income stream is the full purchase price.

Note if your pension or ETP annuity started before 1 July 1994 or was purchased entirely with amounts rolled over directly from one or more income streams that commenced prior to July 1994, a different calculation applies for your UPP. In this case, your UPP is calculated generally as the total ETP less any post-June 1983 component.

Unfranked dividend

A dividend that does not have a franking credit associated with it. Typically, unfranked dividends are those paid out of the profits of the company that are not subject to company tax.

Unit trust

A type of trust where the rights of each beneficiary to income and capital are fixed, and are determined by the number of units held by the beneficiary.

V

There are no glossary terms available for this letter of the alphabet.

W

Withholding tax

Withholding tax is the tax deducted from certain types of investment income paid to non-residents or where a Tax File Number has not been notified. The tax is withheld by the payer of the investment income before it is paid to the investor, and then remitted to the Tax Office.

XYZ

There are no glossary terms available for this letter of the alphabet.

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