SMSF Strategies
There are many SMSF strategies, but the one which will work for you will depend on the circumstances of the all the parties involved. At Powers we work with you to determine what SMSF strategy suits you. Your strategy will be unique for your circumstances and tailored to acheive your specific objectives.
Our strategies come with over 30 years of experience working with SMSFs and being an accredited Self Managed Superannuation specialist.
This is what we do best.
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Borrowing - Unit Trusts / Property
Since September 2007, SMSFs have been able to borrow money on a non-recourse basis from a lender to acquire certain assets provided the right investment structure is established and guidelines and rules issued by the Australian Taxation Office are followed.
The guidelines and rules issued by the ATO are continuing to evolve for the different borrowing arrangements that can be put in place or the types of investments that may be acquired using a borrowing arrangement. There are additional limitations on whether investments can be improved or repaired where investments have been damaged or destroyed. In general, the borrowing arrangement must be used for the acquisition of an asset using a property holding trust with a non recourse loan.
A simplified overview of the borrowing arrangement involves;
- The SMSF borrowing from a lender on a non recourse basis for a property
- The establishment of a property holding trust with a corporate trustee where the SMSF is the only investor
- The acquisition of the property by the Trust which can then be tenanted
- There is a flow of funds from the SMSF to the Trust for the purchase and from the Trust to the SMSF for the rent
- Financial Statements are then prepared on an annual basis to bring to account the transactions
At Powers we have a detailed knowledge of the borrowing rules for an SMSF and the use of a property holding trust along with the evolving rules and guidelines issued by the Australian Tax Office. This means we can discuss with you the issues and risks that need to be addressed with the implementation of this structure.We also provide a service where we work with you to establish a property holding Trust with a preferred lawyer or lender so that you have a borrowing structure suitable for your SMSF.
You can also read our Blog: Borrowing for your SMSF, is it the right decision?
Want to know more about how to establish a property holding trust for your SMSF?
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Consolidation of Super
The biggest advantage of combining all of your super accounts is the potential savings in administration fees, because in general the larger your super account balance, the smaller the proportion of fees you’re charged for that account.
If you’re paying fees on multiple accounts with smaller balances, you should reduce the amount of fees you pay by reducing the number of super funds you have and increasing the balance of your chosen fund at the same time. Having one super account means you only have one set of paperwork to manage which will make it easier to keep on top of your super and understand exactly how it’s performing.
Consolidating your super is not just about saving money in fees, it’s also about giving your super the potential to really grow. With the power of compounding returns, the money you save in fees could really help grow your super balance. It also reduces the likelihood of you ending up with lost super in the long run.
At Powers we help you to identify where your multiple super accounts are and then explore what is most appropriate for you and how to consolidate your super into an SMSF or to a single superannuation fund. We can then help you with the process of rolling over your super into a single balance.
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Compliance - Financial Statements
Trustees have a responsibility to ensure financial statements meet the requirements of the SIS Act and are audited.
At Powers we can prepare financial statements and arrange the audit to ensure compliance with the SIS Act.
We understand what the SIS Act and Regulations mean when preparing financial statements.
Need help with the compliance of your Financial Statements?
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Retirement Planning
Your SMSF will be a key component of your retirement planning as the SMSF can be used to pay lump sums or concessionally taxed income streams. If you are over 60 the benefits paid from an SMSF will be tax-free.
Retirement Planning involves knowing when you will retire and with how much.
The more that you can contribute into your SMSF before retirement the greater your retirement benefit will be. At Powers we work with you to plan your retirement goals and acheive them.
It may mean establishing an annual contribution strategy, establishing an investment strategy or consolidating all of your Superannuation in your SMSF so that you can make the investment decisions for the SMSF.
Without planning for your retirement it is unlikely that you will achieve your goals.
Read our Blog: Superannuation and Planning your Retirement
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Pension Strategies
At Powers we know pension strategies and our goal is make sure your SMSF has the pension strategy that suits you.
Our pension strategies look at what you need as a pension from your SMSF. Maybe it is to minimise your pension as you have other sources of income, or to maximise your entitlement for a Government Pension, or maybe you want to leave a residual benefit for your children and grandchildren.
Our Pension strategies help to meet the needs of your SMSF. A pension can be paid from your SMSF once you are 55, based on the capital in the SMSF each year and the age of pensioner. The pension must be paid at least yearly and if you are over 60 will be tax free.
Just because you have commenced a pension does not prevent you making further contributions to your SMSF should the opportunity arise.
Want to know more about commencing a pension?Want Powers Superannuation Services to review your pension strategy to make sure you are getting the best benefit for you?
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Individuals: Consulting
Your superannuation is yours and no one else’s. We work with you so that you retain control of your superannuation. We want to have your superannuation working for you.
Superannuation is an investment vehicle for your retirement that can be accumulated in a large industry or public superannuation fund or you can establish your own self-managed superannuation fund (SMSF). There are advantages and disadvantages for either.
It is possible that your superannuation can provide you with a pension or by making additional contributions you will get a free government contribution.
It is also possible to use your superannuation to choose your own shares or acquire the property that you want.
Most individuals, whether or not they are employed, can make superannuation contributions or can expect their employer to make contributions for them. This contribution is your superannuation entitlement. Keeping track of your superannuation entitlement is vital to ensure that you get the maximum benefit.
At Powers we focus on what is best for you and what you want to do. We ensure you achieve your goals with your SMSF.
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Capital Gains Tax
Capital Gains Tax is paid by Superannuation Funds, however, it will be at a maximum rate of 15%. If the capital gains occur after the Superannuation Fund has commenced to pay pensions then it is possible that there will be no capital gains tax paid. Yes, that is correct!
Superannuation Funds are entitled to a discount on their capital gains just like an individual tax payer, except that the discount is only 1/3 rather than 50%. This results in the capital gain being taxed at 10% rather than 15%.
For a Superannuation Fund to be entitled to the discounted capital gain tax, it must own the asset for at least a year before the asset is disposed. Making a capital gain from an investment is a major reason for a superannuation fund to acquire and hold an investment.
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