Tax Planning Strategy #1: Establish a Self-Managed Super Fund (SMSF)

Everyone is talking about SMSF’s these days. Recent changes to the laws for operating SMSF’s have in our opinion made them an option that every one of our client’s needs to consider.

Very simply, a SMSF is a super fund that you fully control. You make all the investment choices – including shares, managed funds, property, and cash. SMSF’s can now borrow from a bank to purchase investment properties.

Strategy

Choosing the right STRATEGY for your SMSF is the key.

Here’s a brilliant strategy called the Retirement Home Strategy:

An investor finds a property they’d like to live in during their retirement. They use money in their SMSF as a deposit and borrow into a special super fund borrowing arrangement with the bank to complete the transaction.

Warning: A member (or a relative of a member) of a SMSF by law cannot live in a property owned by a SMSF.

However, while the property is owned by the SMSF it’s rented to UNRELATED INDIVIDUALS for a market-based rent.

Upon retirement the SMSF members start a pension and sell their current family home. They then use the proceeds from the sale of their home to buy the property from their SMSF at market rates.

The sale of the SMSF-held property is capital gains tax free because the SMSF is in pension phase. When the transaction is complete the super fund has liquid assets to pay their retirement income.

Estate Planning

Another key reason for using a SMSF is that it gives you very exact estate planning options. For example, you can nominate a specific dependent (spouse or child under 18) to receive your super benefit if you die. Unlike a Will, this cannot be contested.

Would you like NO TAX on your Investments?

Once you turn age 60, you can start to pay yourself a pension from your SMSF, and there is NO tax on income of the SMSF and NO tax on any capital gains.

This means you can gradually sell down assets (including property) held in your SMSF and pay NO TAX regardless of any capital gain you make.

We believe this is an absolutely brilliant outcome – and it’s possibly far better than owning an investment property in your individual name or in a Family Trust.

Please contact our office TODAY and make a time to discuss your family’s financial situation with one of our highly qualified Financial Planners.

Your appointment with us may mean you have hundreds of thousands more in assets when you retire. What a difference that would make!

Nicolas Kyriopoulos

Peterson Group

E: info@petersongroup.com.au

P: 03 9381 1500

168 Edward Street, East Brunswick, Vic, 3057

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