Tax assumptions audit
Checked: 13 August 2026. Every figure below has a primary source you can open and verify yourself. Where a source is a commentary site rather than a government one, that is stated.
What this document is for
The calculators on this site do not encode tax law. There is no bracket table, no means test, no allowance logic anywhere in the code. Every tax rate is a number you type into a box, and the calculator simply multiplies by it.
That is a deliberate design decision, and it has one consequence worth being clear about: the calculators cannot be wrong about tax law, because they don't state any. What they can be wrong about is the starting figures they suggest when you pick a country. This document audits those.
It covers three things:
- Every default that carries a tax assumption, what the law actually says, and a source
- Where the model is simplified, and which direction the simplification pushes the answer
- What a user must not rely on this site for
1. Defaults audited
Minimum withdrawal rules — the only tax rules actually modelled
These are the one place the site implements a rule rather than accepting a rate. All three tables were transcribed from published sources and independently re-checked in Python.
| Country | Rule | Starts | Figures used | Source | Confidence |
|---|---|---|---|---|---|
| US | Required minimum distributions | 73 | Uniform Lifetime Table: 26.5 at 73, 24.6 at 75, 20.2 at 80, 16.0 at 85, 12.2 at 90, 8.9 at 95, 2.0 at 120 | IRS Publication 590-B, Appendix B Table III · RMD start age | High — table unchanged since 2022 |
| Canada | RRIF minimum withdrawals | 71 | 5.28% at 71, 5.82% at 75, 6.82% at 80, 8.51% at 85, 11.92% at 90, 20% from 95 | CRA prescribed factors, via CIBC Wood Gundy | High — anchors verified; full table is a commentary source |
| Australia | Minimum pension drawdown | Preservation age (60) | 4% under 65, 5% to 74, 6% to 79, 7% to 84, 9% to 89, 11% to 94, 14% from 95 | ATO — Payments from super | High |
| UK | None | — | Flexi-access drawdown has no minimum | GOV.UK — taking your pension | High |
Verification you can repeat: at age 73 the US requirement is 100 ÷ 26.5 = 3.77% of the sheltered balance. At 90 it is 100 ÷ 12.2 = 8.20%. Both match what the calculator produces.
Pension deferral rates (calculator 03)
| Country | Default | The law | Source | Confidence |
|---|---|---|---|---|
| US | Normal 67, earliest 62, latest 70, −6%/yr early, +8%/yr deferred | Full retirement age is 67 for anyone born 1960 or later. Delayed retirement credits are 8% a year to 70. The early reduction is tiered — about 6.67%/yr for the first three years, 5%/yr after — so our flat 6% is an approximation | SSA benefit reduction rules | Medium — deliberate simplification, documented on the page |
| UK | Normal 67, no early claiming, +5.8%/yr deferred | State Pension increases 1% for every 9 weeks deferred ≈ 5.8% a year. Cannot be claimed early. State Pension age is 66 rising to 67 between 2026 and 2028 | Age UK factsheet 19 (April 2026) | High |
| Canada | Normal 65, earliest 60, latest 70, −7.2%/yr, +8.4%/yr | CPP is reduced 0.6% per month before 65 (7.2%/yr, max 36% at 60) and increased 0.7% per month after (8.4%/yr, max 42% at 70) | RBC — taking CPP/QPP | High — rates are statutory |
| Australia | 67, no adjustment either way | Age Pension starts at 67 with no deferral uplift. The calculator says so and tells the user it has limited application | Services Australia | High |
Investment return tax (calculators 20, 24)
| Country | Default | The law | Source | Confidence |
|---|---|---|---|---|
| US | 20% | Long-term capital gains are 0%, 15% or 20% by income band, plus a 3.8% net investment income tax above certain thresholds. 20% is therefore a reasonable middle figure for a higher-income retiree but too high for many and too low for the very highest | IRS Topic 409 | Medium — a single rate cannot represent a banded system |
| UK | 20% → corrected to 24% | CGT from 6 April 2026 is 18% within the basic rate band and 24% above it, with a £3,000 annual exempt amount | GOV.UK CGT rates | High |
| Canada | 25% | The inclusion rate is 50%, applied to your marginal rate. The proposed increase to 66.67% was cancelled on 21 March 2025 — this is worth knowing because a great deal of stale commentary still says otherwise | Prime Minister's announcement, 21 March 2025 | High |
| Australia | 15% | Super earnings are taxed at 15% in accumulation and 0% in retirement phase. Outside super, CGT is at marginal rates with a 50% discount after 12 months | ATO — retirement withdrawal | Medium — 15% fits accumulation, not pension phase |
Mortgage interest relief (calculator 20)
This one is worth stating plainly because the calculator has a box for it and in three of four countries the correct answer is zero.
| Country | Default | The law | Source |
|---|---|---|---|
| UK | 0% | Relief for owner-occupiers was abolished on 6 April 2000 when MIRAS ended. Landlords get only a 20% basic-rate credit under Section 24 | House of Commons Library, MIRAS |
| Australia | 0% | Not deductible on your own home. Deductible only on investment property | Canstar summary |
| Canada | 0% | Not deductible on a personal residence. Deductible on rental property | OECD PH2.2 tax relief for home ownership |
| US | 0% | Deductible only if you itemise, and since the standard deduction rose to $16,100 single / $32,200 joint for 2026, roughly 90% of taxpayers do not itemise. Zero is the right default for most people | Tax Policy Center on itemising |
Account types in the withdrawal-order comparison (calculator 02)
The calculator asks for three accounts and an effective tax rate for each. It never names them, so the mapping is a suggestion.
| Country | A | B | C | Note |
|---|---|---|---|---|
| US | Taxable 15% | Traditional 401(k)/IRA 30% | Roth 0% | Traditional withdrawals are ordinary income; Roth is tax-free |
| UK | General account 18% | Pension 20% | ISA 0% | The pension figure understates the benefit: 25% of a pension can normally be taken tax-free, capped at £268,275 (GOV.UK) |
| Australia | Super accumulation 15% | Personal 30% | Super pension phase 0% | Benefits are generally tax-free after 60 |
| Canada | Non-registered 15% | RRSP/RRIF 30% | TFSA 0% | RRIF withdrawals are fully taxable and count toward the OAS clawback |
Estate thresholds (calculator 08)
| Country | Default | The law | Source |
|---|---|---|---|
| UK | £325,000 | Nil-rate band £325,000, plus a £175,000 residence nil-rate band, both frozen to 2030/31. Transfers between spouses can double the effective figure | Fidelity summary of 2026/27 allowances |
| US | 0 | The federal exemption is in the millions so most estates owe nothing federally, but several states levy at far lower thresholds. Zero avoids a false alarm; the note tells users to enter their state figure | — |
| Australia | 0 | No inheritance or estate tax. Tax can still arise on super paid to non-dependants | — |
| Canada | 0 | No estate tax, but a deemed disposition on death can create a large capital gains bill that this checklist does not model | — |
1a. Announced but not yet law
Legislation still before Parliament should not drive a calculator's defaults, so nothing in this section is built into the site. It is recorded here because it is significant, dated, and easy to get wrong — a great deal of commentary already reports it as settled.
Australia — capital gains tax reform from 1 July 2027
Announced in the 2026–27 Federal Budget. Two Bills — Treasury Laws Amendment (Tax Reform No. 1) Bill 2026 and Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026 — were introduced on 28 May 2026 and had not passed as at 13 August 2026.
| Proposed change | Effect |
|---|---|
| The 50% CGT discount is removed for individuals and trusts | Replaced by cost-base indexation to CPI, so only real gains above inflation are taxed, with a 30% minimum tax floor. Indexation applies only where the asset has been held at least 12 months |
| Pre-CGT assets lose their blanket exemption | Assets acquired before 20 September 1985 become taxable on growth after 1 July 2027. Growth before that date stays permanently exempt |
| Cost base reset | Gains are measured from the asset's market value at 1 July 2027 |
| New housing carve-out | Those disposing of new residential or affordable housing may choose the 50% discount (up to 60% for affordable housing) instead of the new regime |
Practical consequence if it passes: anyone holding a pre-1985 asset will want a documented market valuation as at 1 July 2027, because that figure becomes the deemed cost base. There is no way to reconstruct it after the fact.
Note that the pre-1985 change attracts the attention while the removal of the 50% discount is the far larger story — it affects essentially every Australian investor holding shares or an investment property, not the small number sitting on pre-1985 assets.
Sources: CA ANZ · PwC Australia · Pitcher Partners
Australian CGT exemptions the site does not model
Current law, verified against the ATO. Recorded because they come up constantly and two of them are routinely conflated.
| Exemption | Threshold and conditions |
|---|---|
| Cars and motorcycles | Exempt. A “car” means a motor vehicle carrying under 1 tonne and fewer than 9 passengers — a heavier ute or a larger van does not qualify. Buying and selling repeatedly for profit can make it ordinary income instead |
| Main residence | Exempt, but capped at 2 hectares of land, reduced where the home is rented out or used for business, and denied to foreign residents for disposals after 30 June 2020 unless the life events test is met |
| Personal use assets | Gains disregarded if acquired for $10,000 or less. Losses are disregarded whatever it cost. Items normally sold as a set are tested on the set's total cost |
| Collectables | Gains disregarded if acquired for $500 or less. Losses are quarantined, not disregarded — deductible only against gains on other collectables. This is a different rule from personal use assets and the two are frequently confused |
| Pre-CGT assets | Acquired before 20 September 1985 — exempt under current law, subject to the reform above |
Sources: ATO — list of CGT assets and exemptions · ATO — home on more than 2 hectares · ATO — main residence exemption for foreign residents
2. Simplifications, and which way they push
Being explicit about the direction of an error matters more than pretending there isn't one.
| Simplification | Effect on the answer |
|---|---|
| A single flat tax rate instead of brackets | Overstates tax for low-income retirees, understates it for high-income ones. Largest distortion in calculator 02's ordering comparison |
| Tax-free lump sums ignored (UK 25%, Australia after 60) | Overstates the tax cost of drawing on a pension in those countries |
| Allowances ignored (UK £3,000 CGT, £12,570 personal allowance) | Overstates tax on small gains and modest incomes |
| Means-tested benefits not modelled (Age Pension, OAS clawback, Medicaid) | Can reverse a conclusion entirely. A withdrawal that looks tax-efficient may cost more in lost benefits than it saves |
| US early-claiming reduction flattened to 6% | Slightly understates the penalty for claiming at 62, slightly overstates it at 65–66 |
| Forced withdrawals modelled as costing only the tax on the surplus | Correct in principle — the money is reinvested, not lost. A model treating the whole withdrawal as spent overstates the damage by a very large margin |
| Historical crash figures are S&P 500 for every country | Illustrative of scale. A UK or Australian investor's actual experience differed |
| No state, provincial or local tax anywhere | Understates total tax in the US and Canada particularly |
3. What this site must not be used for
- Deciding when to claim a state or government pension. Means testing, survivor benefits and earnings tests are not modelled and routinely change the answer.
- Any Australian Age Pension question. It is means-tested on both income and assets, and none of that is modelled.
- Estate or inheritance tax planning. The checklist scores whether you have documents, not what they will cost.
- Aged care means testing in any country.
- A withdrawal sequencing decision. Calculator 02 is a way of seeing the shape of the trade-off, not a recommendation.
4. How to keep this current
Almost nothing here changes more than once a year, and none of the four tax authorities publishes a machine-readable rates feed — their APIs are for filing, not lookup. So this is a hand-maintained file, and that is the right call for roughly forty numbers.
Review each April and October, and after any Budget. The items most likely to move:
- UK — Budget changes to CGT rates, allowances and the nil-rate band freeze
- US — annual inflation adjustments, published each autumn in an IRS Notice
- Australia — indexation of caps and thresholds each 1 July
- Canada — annual indexation, and any revival of the inclusion-rate proposal
The withdrawal tables are the most stable: the US table has not changed since 2022, and the Australian and Canadian factors are set in regulation.
General information only. Nothing here is tax advice. Every figure is reproduced from the source cited and may have changed since the date at the top of this document — always check the source before relying on it.