POOLED DEVELOPMENT FUNDS
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     oldwombat
Member
Username: oldwombat
Post Number: 297
Registered: 04-2004Rating: N/A
Votes: 0
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| | Wednesday, March 23, 2005 - 05:16 pm: |  
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jr, you were asking about tax free structure on One Tel thread. I have spoken about Pooled Development Funds previously but it probably doesn't hurt to recap as it was a while ago now and there have been some changes.
Pooled Development Funds have a mandate to make certain types of investments. The criteria for these investments include:
Investments must be in Australian companies
The PDF must purchase at least 10% of a company's shares
PDFs cannot use more than 30% of its committed capital to an investee company
Investee companies must be smaller than $50 million in capitalisation
PDFs can not invest in retail or real estate businesses
A PDF can either focus on a specific industry such as wine, technology, mining, or medicine or spread its investments across a number of different industries
Pooled Development Funds may be appropriate for investors seeking:
Diversification into small Australian companies
A tax effective long term investment
Exposure to companies at a formative stage of development
Potential high returns with high volatility
Concentrated exposure to one industry
The Pooled Development Fund Program was established in 1992 to assist small to medium enterprises (SMEs) gain access to equity capital.
The PDFs program is governed by the PDF Act 1992 (Cth). Under the act, PDFs have favourable tax concessions, which include:
Shareholders are exempt from income and capital gains tax from the sale of their shares. However investors cannot claim a capital loss to offset gains.
PDFs are taxed on 15% of income and gains from investments in SMEs instead of the normal 30% corporate tax rate
PDFs are taxed 25% on other income and gains
Despite the concessional PDF tax rates, PDFs can pass on franking credits at the 30% tax rate, which allows the investors to benefit from additional franking credits.
Shareholders receiving franked dividends can choose to either be exempt from income tax (and forgo the franking credits) or asses the income in the normal fashion (including franking credits)
Australian shareholders are exempt from income tax on unfranked dividends
Non-resident shareholders in PDFs are exempt from both income tax and withholding tax for both franked and unfranked dividends
Example:
A shareholder in a PDF receives $50 in unfranked dividends. This $50 in income is therefore tax-free. If the dividend was fully franked, the shareholder has the choice of electing to take the $50 tax-free, or take it as a fully franked dividend.
If this is the case, the grossed up amount is $71.43, with the imputation credit being $21.43. If the shareholder decides to sell the shares in the PDF, then any gains made are tax-free.
I have listed all of the Pooled Development Funds that are currently available...that I know of, that is.
PLEASE BE CAREFUL....THEY CHANGE THEIR NAMES EVERY SO OFTEN AND THEY SOMETIMES RELINQUISH THEIR PDF STATUS. SO WATCH THEM LIKE A HAWK.
Authorised Investment Fund......AIY
Biotech Capital Limited.....BTC
First Wine Fund.......FWF
Mariner Wealth Management.....MWM
Lion Selection Group.....LSG
Strategic Pooled Development....SPD
Citadel Pooled Development....CID
Cytopia Limited....CYT
Acrux Limited.....ACR
Regards
OW
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dogalog
Member
Username: dogalog
Post Number: 1001
Registered: 03-2004Rating: N/A
Votes: 0
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| | Wednesday, March 23, 2005 - 05:54 pm: |
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I'm extremely cranky today,wombat[outside influences]but on my quick read these seem like a Lurk nix positive.Some kind of jumped up respectability for those who hope for 'proper'investment opportunities but don't have the intestinal fortitude nuf to play their own game?
Is this just some jumped-up alternative to Avocado farms,Maca Nuts,Movies,Tree plantations with a veneer of nationalism of helping out 'emerging' industries?
ahh,look sorry wombo if you go in for this,but what can i say?i can't stand tripe unless i'm selling it ,of course.I don't eat from it[tripe]but others are free to.
cheers,
jr
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oldwombat
Member
Username: oldwombat
Post Number: 298
Registered: 04-2004Rating: N/A
Votes: 0
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| | Wednesday, March 23, 2005 - 06:21 pm: |
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Nah mate, I don't like them at all. I only keep track of them so I don't accidentally trade one.
I think they were originally set up to be a kind of incentive for laying out venture capital.
The first two were called Greenchip Development Capital - GDC. It then morphed into Vital Capital - VIT. Then finally it became Phosphogenics - POH
The second was Greenchip Resources - GRC. This morphed into Ecat- ECL. Then finally into Clinical Cell Culture - CCE.
CCE and POH are no longer Pooled Development Funds.
Way back when they were first launched, a lot of big time investors got really badly burned. So this kind of fund went right off the boil for ages. Then as the dot com era got under way and a lot of 'new meat' hit the markets, out popped these funds again. They mostly keep a low profile these days.
I know a better 'Lurk' that I have been meaning to discuss with you. You may know something about it...later.
OW
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oldwombat
Member
Username: oldwombat
Post Number: 317
Registered: 04-2004Rating: N/A
Votes: 0
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| | Monday, April 04, 2005 - 01:28 am: |
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Keep reading you will find it......
http://www.theage.com.au/news/National/Rocket-Rod-crashes-to-earth/2005/02/16/11 08500151281.html
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