I have some Coles shares. Should I sell them before applying for the age pension?

I received 500 Coles Myer shares in the 1990s at no cost. Since then, they have transferred to Wesfarmers and Coles shares. I have always used my dividends to buy more shares, so I’m up to about 300 of each. The total holding is $27,000. I am about to apply for the age pension, so should I sell them before or after I apply? I have taken early retirement to look after my wife, and we live on my superannuation. Also, how much capital gains tax would I be liable to pay?

The value of the Coles, and other, shares will be an asset for age pension purposes and for the income test.Credit: Glenn Campbell

Irrespective of whether you hold the shares or sell them, which means converting them to cash, their value will be an asset for age pension purposes and for the income test. Either the shares or cash will be given a deemed value. Therefore, there’s no difference. If you feel the shares appear to have good long-term value, your best strategy might be to hold them. If you sell them, CGT should be fairly small because you were using dividend reinvestment, which keeps increasing the cost base. I would think a taxable gain of $9000 after a 50 per cent discount is a reasonable guess – if so, capital gains tax would be calculated by adding $9000 to your taxable income in the year you dispose of them.

I have a query regarding splitting your super with your spouse and maximising potential Centrelink benefits. My retired husband is 65 and in this financial year and the next we will be selling both our investment houses, which are in his name only. He doesn’t want to be bothered with meeting work tests when he’s older than 67, so it’s time to sell. We’ve held the houses since 2009 and 2010. As you have often said, if only we’d put the money into shares, we’d be much better off! He has only $60,000 in super.

He has about $150,000 of unused concessional contributions from the last five years, so he will be making a concessional contribution to his super in both financial years to help offset capital gains tax. With the remaining balance from selling our investment homes, we want to make a non-concessional contribution to my super account as I am a few years younger than him.

When he’s being assessed for the age pension at 67, I understand Centrelink looks back over the previous five years and will see that he sold two investment properties in his name. Will Centrelink treat the super contributions he makes with those sale proceeds to my super account as a “gift”, and therefore, will the amount be included as part of his assets for assessment?

You are on the right track. Keep in mind that as well as the catch-up concessional contributions, he can use the $30,000 concessional cap available in the financial year you sell the properties. His super balance is under $500,000, so there should be no issue with making catch-up contributions. The good news is that Centrelink disregards all monies transferred between partners, so there’s no question of this being treated as a gift. Just bear in mind that money in superannuation in your name will not be assessed until age 67 unless you start a pension from that fund.

I am 77 and my wife is 60. I plan to start an account-based pension. With such pensions, one is required to take a percentage of their account balance as a minimum pension each year. If I nominate my wife as a reversionary beneficiary, whose age is used to determine the minimum pension?

While your wife is a nominated beneficiary, your age will be used when calculating the minimum pension. However, once the pension reverts to your wife, her age will be taken into account.

I have a question about an investment property shared with my partner. When it came to our tax return, it worked fine that we split 50/50 the cost and income from our investment property. But since last year our situation has changed, as my partner has been made redundant. Can I share all the cost and income from our investment property when doing my tax return as my partner has no income?

Unfortunately, there is no way out. You cannot rewrite history.

Noel Whittaker is the author of Retirement Made Simple and other books on personal finance. [e-mail]

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.