Self Managed Super Funds provide you with advantages over regular superannuation funds because you can:
- Buy residential property in SMSF.
- Buy real business property from which to operate your business from.
- Buy shares directly and use gearing to create excess franking credits.
- Use as estate planning vehicle with no external trustees.
Buy Residential Property in SMSF
One of the advantages of self managed super funds is that you can invest directly in residential property through your super. Owning a residential investment property within your SMSF can be significantly more tax effective than investing in a property in your personal name. To assist our clients make these investments we can also assist you with financing and help you with the right investment structures to ensure your Fund complies with all the Australian Tax Office rulings surrounding property investments.
Buying and owning real business property from which you can operate your business
If you are a business owner, your self managed super fund can own the property from which you run your own business. Superannuation rules require your business to pay a commercial rate of rent. This requirement provides an opportunity to accelerate your superannuation savings. The rent that your business pays into your SMSF will be tax deductible to your business, but more importantly, for superannuation purposes, it will not be treated as a superannuation contribution. As such they do not fall under the Government’s superannuation contributions limits.
Buy shares directly and use gearing to create excess franking credits
Australian shares which pay dividends with attached imputation credits, better know as fully franked shares, provide significant tax benefits within self managed super funds because they can be used as an offset against the super fund’s tax liability. Using a properly constructed strategy many funds will pay reduced tax, some will pay reduced tax, some will pay no tax, and others will end up with a tax rebate – that is, a cheque back from the tax office. We can assist you to build a diversified portfolio of shares that capitalise on the tax benefits of the dividend imputation system.
Use as estate planning vehicle with no external trustees
Although no one likes to think about dying, planning your estate now effectively means the distribution of your assets is managed according to your wishes. Self managed super funds can be a useful vehicle for estate and succession planning as trustees and members can ensure they have the final say in the distribution of death benefits via the trust deed. Make sure that your self managed super fund trust deed allows you to efficiently make payment of death benefits, to consider the role of both binding death benefit nominations and non-binding nominations in the estate plans of members of the self managed super fund.
If you would like to discuss any of these strategies or others, please contact us by completing the contact form.
This information provided is general in nature and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstances. We recommend seeking accountants advice as to structure Mojo Finance as an Authorised Representative of AFG, AFSL number 389087.