Australian Securities Exchange – Shares with highest dividend yields

I was interested in getting a list of Australian shares which pay the highest dividend yields, that is the highest dividend over share price. Google Finance already displays the dividend yield value so it was only a matter of collecting all the data and displaying it in a neat table. While I was collecting the dividend yield data I decided I may as well collect all the other company data.

The ASX provides a listing of Officially Listed Companies, this was imported on 25th October 2012 and will remain static.

The rest of the company data is updated daily.

To find the highest values simply click the column heading to sort the data.

Here is the top 10 of dividend yields;

Company Code Yield
BIOTECH CAPITAL LIMITED BTC 50
CSG LIMITED CSV 45.9
SERIES 2010-2 REDS TRUST RDA 44.7
HASTINGS HIGH YIELD FUND HHY 41.9
RHG LIMITED RHG 34.9
TROJAN EQUITY LIMITED TJN 32.9
LEMARNE CORPORATION LIMITED LMC 31
MULTIPLEX EUROPEAN PROPERTY FUND MUE 19.2
SEVEN WEST MEDIA LIMITED SWM 19
APN NEWS & MEDIA LIMITED APN 18.1

ASX stocks with highest dividend yield

http://thydzik.com/asx/

To trust or not to trust – the benefits of a discretionary (family) trust for minimising income tax

A few weeks ago I blogged about the insignificant benefits of a discretionary (or family) trust compared with a basic 50-50 joint split when it came to Capital Gains Tax (CGT), this week I will compare the two when it comes to rental income.

Rental income is different to CGT in that rental income is generally a lot less, and secondly, it is an annual income so any tax benefits can be compounded yearly. The results should be the same for values when Capital Gain and Rental Income are he same.

Again, I have based the below charts on a 50-50 split were one person has an supplementary income of $100,000 per year. I have ranged the annual rental income from minus $250,000 to plus $250,000, this is a huge sum for rental income and would require around $5000 rental income per week, and this is all after management costs and deductions.

A basic comparison between the two, with annual rental income versus total tax payable, it can be observed that that at values less than -$163,500 (a significant yearly loss), the 50-50 split can use negative gearing to offset the individual $100,000 supplementary income, whilst the discretionary trust cannot take advantage of negative gearing. This means there will always be a $25,000 tax bill as long as the properties are negatively geared.  As the net rental income approaches zero (or neutrally geared), the 50-50 split tax and trust tax merge.

50-50 split tax versus family trust tax

Finally, once the property is positively geared, the benefits of a discretionary trust are visible; the first $18,200 is tax free and following from there the tax bill is always slightly lower than the 50-50 split.

Plotting the tax difference between the two, a positive value being when a discretionary trust is beneficial, it can be observed that the maximum difference is around $3,300 with incomes around $18,000 to $36,000, this is a significant yearly saving.

The tax difference between a 50-50 split and family trust

Looking at the percentage difference compared to the yearly income, it can be again observed that at $18,000 or income a maximum of around 18% can be saved when a discretionary trust is used. It dips and stops at around a yearly income of$70,000 were it then hovers around 1% percentage difference.

The tax percent difference between a 50-50 split and family trust

So what does this all mean?

Firstly, a discretionary trust should not be used for negatively geared properties, this is obvious.

Secondly, a discretionary trust has significant benefits when used for positively geared properties. And because this in annual income, these benefits are compounded yearly. A saving of $3,300 yearly is a saving of $33,000 over ten years.

So one would think it would be wise to move the properties into a discretionary trust as soon as the properties are positively geared.

I will investigate this in my next post.

Update September 2012

Something I failed to mention was that whilst a trust is not beneficial for negative gearing, losses stay in the trust, meaning when the income is positively geared, tax will be minimised while the losses are accounted for.