Tax Planning Strategy #1 – Establish a SMSF
Lan Nguyen, Chartered Accountant
Establish a Self – Managed Super Fund (SMSF) – How to make it your family’s wealth VAULT and legally pay NIL tax.
Should you have a self – managed fund?
In summary, a self-managed super fund has trustees, so that would be a company with your parents, your partner, whoever. You can have up to four people as members of a self-managed super fund. People normally get a self-managed funds, but they still want more control over their investment choice. So if you’re not willing to put in the time to be an effective trustee, it’s not worth doing. On the other hand, if you are willing to put in the time, consider using a holding trust to buy a property is one very, very interesting option.
A self-managed fund can’t borrow, but by using it to hold trust, money can be borrowed from a bank to buy a property.
For example, with $300,000 or $400,000, your rent income is generated on top of the ability to self manage your fund. You’ve got a larger gross asset value working with your self-managed fund. Now, if you did this repeatedly and had two or three copies, by the time your age is 60 you can switch the fund to pension phase. This means when you sell off properties, there is zero capital gains tax, and any ongoing income on the fund is taxed zero percent, and over age 60, anything you can pull out is tax free. So that’s why self-managed funds are really, really worth considering, and that’s why we’d like to talk to you about that.
What are some really good things about self managed super funds you need to consider?
One of the great benefits is the flexibility inside the actual super fund itself. You can include insurances in there, client’s life insurance and disability insurances. Essentially, the premiums can be coming from the super fund itself. Another great benefit is the fact with estate planning, you can choose exactly where the assets this super fund holds, who they actually go to without any issues over claim ability from external sources. That’s a big bonus because that way you can send money to beneficiaries and it’s not contestable like it could be with a will.
Why are clients doing self managed funds in shares?
With shares, you can hold direct shares within your self-managed super fund. It works exactly the same as if you’re holding a share account with an e-trade or someone external. You can have managed funds in there, and of course, you can have property, bonds, term deposits and cash as well.
Written by Lan Nguyen, Chartered Accountant and Wealth Adviser from Success Accounting Group.
Please come and talk to a Success team member. Self – managed super funds are worth looking in to for your retirement future.
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About Lan Nguyen
Lan is the Founder and Chief Strategist at Success Accounting Group, Melbourne based CA firm. In a matter of short 8 years she has built up a reputable Chartered accounting firm with 3 offices and a team of 6 professional accountants and support team members. Her mission is to provide Innovative and Strategic Financial advice to help her customers make smarter financial decisions today for a brighter future.
Success Accounting Group is for established business owners who would like help to grow a sustained business. As a business owner you understand what drives your business success with our accounting team taking care of the rest.
Success and Wealth
Success Accounting Group Pty Ltd
Oakleigh, VIC, 3166
