There is a lot of talk around about setting up a Self Managed Super Fund. SMSF’s are about taking control of your investing and improving returns, so if you’ve got a super balance of $150,000 or thereabouts, and the commitment to ensure your super is maximized, then you are a likely candidate for a SMSF.
SMSF are simply a structure to hold assets within. They are no different to family trusts or a company, with its own set of rules. Basically preferential tax treatment, a condition that it cannot be withdrawn until retirement and rules as to where it can be invested.
The real benefit of a SMSF is the ability to not only own shares and other financial investments but to also hold property (usually a mix). This can be commercial or residential property, but the rules currently only allow commercial property to be transferred into your fund from a member. Commercial property can also be rented (at Market Value) to a members business, whereas residential property can not be used by members or associates.
Tax rules inside a SMSF are very favorable. The Tax rate on earnings is only 15%, tax on Capital Gains held for greater than a year is 10% and all earnings (including realised Capital gains) after a pension has commenced by the member are tax free. Pensions paid to members above 60 who have retired are also tax free making the structure extremely tax effective.
So, with huge tax benefits and a wide selection of investment options, if you take the time to get the right advice a SMSF can be a great wealth management structure. If you would like more info, or create a strategy for your own situation, please feel free to contact the office on 08 9208 1455.