My wife is 62 and I'll be 62 in January. We have $100,000 each in super and have a mortgage of $300,000 on our home valued at $700,000. Our combined salary is $140,000. We understand there is a way we can reduce our mortgage quicker through a scheme that we pay into and it pays us a pension. We'd like to be debt-free when we retire at 65. Our plan is to travel for a year, rent our house out, then downsize. What do you recommend?

You're talking about a transition to retirement pension. It involves salary sacrificing a chunk of your gross salary into super and at the same time starting an account-based pension from your super fund to compensate for the reduced income. This can boost your retirement finances but you'll need to get an adviser to do the numbers as the benefits differ from one person to another. I'm concerned about renting out your house and travelling after you retire because you could well lose 10 per cent of the property's value when you move your furniture out and the tenants move in. A better option may be to sell your house, place the money on term deposit and go travelling. If you're concerned prices may go up in that time you could buy another home, live in it for a short while before renting it out. This will maintain your CGT exemption.

I'm confused regarding CGT on a pro-rata basis on the sale of a property. I bought an investment holiday unit in 1998 and rented it out until 2006. Since 2006 I've been using it for my own holiday use and not as my primary residence. When I sell it, will there be any pro-rata CGT applicable for the period it was not rented out? If I was to make it my primary residence now, what would be the pro-rata CGT? Is it based on the proportion of the period it was rented out or on the period I used it as my primary residence?

If you live in a property and then rent it out, you are liable for CGT on any increase in value from the date it is rented out until the date you sell it. However, if you rent the property out first and subsequently move in, the CGT is calculated on a pro-rata basis across the whole period of ownership. For example, if you bought a place to rent out 10 years ago and then moved into it two years ago, you'd be entitled to a CGT exemption for two-tenths of the gain if you sold it now. This latter scenario is similar to yours.

I bought a property 14 years ago and have recently sold it. I had tenants in the house for four years then I moved in. I understand I need to pay pro-rata CGT. What can I claim against this amount?

Ongoing expenses such as rates and maintenance should have been claimed in your tax return once it was rented out and should have reduced the tax payable on the rents. Capital expenditure is added to the base cost and will reduce the amount of CGT payable when you sell. Ask your accountant to do the sums for you.

I'm 77, my wife is 60. I'm planning on starting an account-based pension. With such pensions, one is required to take a percentage of the account balance as a minimum pension each year. Can I nominate my wife as a reversionary beneficiary, whose age is taken into account in determining the minimum pension?

If your wife is a reversionary beneficiary, her age will be used when calculating the minimum pension. However, if she is a nominated beneficiary, your age will be the one taken into account.

Noel Whittaker is a director of Whittaker Macnaught. His advice is general in nature and readers should seek their own professional advice. Contact noel.whittaker@whittakermacnaught.com.au.

Questions to Ask Noel, Money, GPO Box 2571, Qld, 4000, or see moneymanager.smh.com.au/sitewide/askanexpert.html.