Self-Managed Superannuation Funds Newcastle

Investors have different reasons for setting up a Self Managed Super Fund (SMSF).

For example:

  • As a fund member, they can determine where their money is invested.
  • They have access to a broader range of investments, such as residential and commercial property, Australian and International shares, managed funds, fixed interest investments and non-traditional assets such as antiques or art – though limitations may apply.
  • Other advantages include concessional taxation rates and flexibility, efficient estate planning, ability to transfer assets into the fund and pooling family assets.
  • You can borrow to invest within your SMSF, which potentially allows you far greater purchasing power to acquire quality investment assets to save for your retirement.

GC Accountants can assist you with all aspects of SMSF establishment and administration and we specialise in the following key areas:

  • Establishment of SMSF trust deed via SuperCentral* Online Deed Update service
  • Establishment of an Australian company to act as Corporate Trustee of the fund
  • SMSF Borrowing to invest – comprehensive technical advice on how to satisfy the complex SMSF borrowing rules
  • Fund record keeping solutions including MYOB and BankLink

Audit of Self-managed Superannuation Funds Newcastle

GC Accountants also offers a Self Managed Super Fund Audit service. The audit provides an opinion on the status of the fund, including the auditor’s assessment of the fund’s compliance with super laws. The ATO have stated that it is important that the auditor is independent and meets the necessary standards for an SMSF approved auditor, and GC Accountants offers you the peace of mind that your fund’s annual reporting requirements have been addressed professionally and ethically.

SuperCentral Online Deed Update Service

Our Firm is able to offer you the services of SuperCentral when establishing your fund’s deed – the benefits of the SuperCentral service include:

  • SuperCentral Governing Rules are regularly and continuously updated, automatically and without paperwork, so your SMSF deed is always compliant and there is never a need to go back and re-sign documents.
  • SUPERCentral is the only service that can offer this truly unique online system
  • SUPERCentral provides you with a ‘set and forget’ arrangement
  • Your SUPERCentral SMSF deed is always compliant, avoiding potential legal and tax problems or associated penalties
  • Advisers and Trustees have coded access to their SMSF Deeds and Precedent Governing Rules; 24 hours – 7 days
  • Complimentary deed archiving
  • Delivers significant time saving and opportunity cost reductions for your fund
  • Advisers never again need review each deed before meeting with a client, while Auditors and the ATO only need to familiarise themselves with one set of Governing Rules
  • You never have to undertake expensive adhoc deed updates again.

 

CASE STUDY – C.CAMPBELL – PURCHASE OF BUSINESS PREMISES – SMSF OR FAMILY TRUST?

SMSF FAMILY TRUST CASE STUDY

Purchasing your own business premises can be a wise decision, leading to long term financial security and growth of your overall wealth. Maximising this potential is even more rewarding, as the following case study will show, comparing the purchase via a Self Managed Super Fund or a Family Trust.

Business Premises: $371,000.00

Buying Considerations: Self Managed Super Fund or Family Trust?

Costing Considerations: Setup Fees and Ongoing Fees

Taxation Considerations: Upfront, Ongoing and Capital Gains Tax

 

Buying within a SMSF
Investment and Strategic   Advice  $          2,500.00
SMSF Setup including Trustee   Company  $          3,300.00
 $          5,800.00
Requirements for Borrowing   Facility
SMSF Bare Trust Corporate Trustee  $          1,200.00
Bank Settlement Fee 1.5% of loan ($371K)  $          5,565.00
Legal and Other Bank Fees  $          1,940.00
 $          8,705.00
Estimated Costs of Buying within SMSF  $         14,505.00

 

Buying within a Family Trust
Set up fees (inc Stamp Duty $500)  $      3,800.00
Bank Settlement Fee 0.25% of loan ($371K)  $         930.00
Other expected Bank Fees estimate  $      1,000.00
 $      5,730.00
Estimated Cost of buying   within a Family Trust  $      5,730.00

Observations at the Point AFTER BUYING CONSIDERATIONS

1.  Bank Fees for SMSF are 1.5% vs. FT 0.25%.

2.  Setup Fees for SMSF are also much larger than FT.

3.  Strategic and Investment Advice is required for SMSF.

 

Ongoing Costs within a SMSF
BankLink Fees  $  1,380.00
SMSF Annual Financials &   Tax Return  $  2,750.00
ASIC Annual Filing Fee  $     600.00
Trust Dees Update Fee  $     150.00
 ATO Supervisory levy  $     200.00
SMSF Annual Audit Fee  $     700.00
Estimated Ongoing Cost of SMSF  $  5,780.00

 

Ongoing Costs within a Family Trust
Land Tax (based on land value $204K)  $  3,264.00
BankLink Fees  $  1,380.00
Tax Return and Financials  $  2,750.00
ASIC Annual Filing  $     600.00
Estimated Ongoing Cost of   Family Trust  $  7,994.00

Observations at this point – AFTER COSTING CONSIDERATIONS

1. Due to Land Tax, Family Trust option blows out here.

2. SMSF Option is more labour intensive

3. Overall costing comparisions, Faily Trsut $6,561.00 less expensive to set up and maintain.

 

Taxation Law Application within a SMSF
Upfront Savings Benefits (over 2 years) *  $         15,000.00
Estimated Tax Savings of SMSF  $         15,000.00

 

Taxation Law Application within a Family Trust
Upfront Savings Benefits  $            –
Estimated Tax Savings of   Family Trust  $           –  

Observations at this point AFTER UPFRONT TAX SAVINGS CONSIDERATION

1. saddling the purchase over two financial years offers a massive $15,000.00 fax saving within a SMSF.

2. SMSF now in front by $8,439.00 (over two years)

* Provided you can sign a contract this financial year and settle post July 1 2013, you stand to gain a significant tax saving by purchasing within a SMSF. This comes about when structuring the purchase to straddle two financial years which will allow us to maximise the concessional contributions into super, using the current salary sacrifice rules that apply. The tax saving will be approx. $100,000.00 x 15%, i.e. $15,000.00 over two financial years.

Taxation Law Application within a SMSF
Tax implications ongoing for   SMSF 15.00%
Paid by the Fund
Taxation Law Application within a Family Trust
Tax implications ongoing for Family Trust  0.00%-45.00% 
Paid in your Personal Income Returns

Observations at this point AFTER ONGOING TAX SAVINGS CONSIDERATION

1. Rental received to the SMSF is taxed at a maximum of 15% and is paid by the Fund.

2. Family Trust option will be compelled to pass out profits to either of both of you, meaning thatthis profit is taxed in your own personal income returns.0.00%-45.00% (Average person’s tax rate is around 30%).

CGT Taxation Law Application within a SMSF
CGT if property held until   retirement 0.00%
CGT if property sold prior to   retirement 15.00%
CGT Taxation Law Application within a Family Trust
Personal Tax Bracket
CGT applied to Personal   Income Returns 0.00% up to 45.00%
(Average 30.00%)

Observations at this point AFTER CGT CONSIDERATIONS

1. If the SMSF holds onto the business premises until you retire and with proper planning, you will pay no CGT.

2. However, if you sell prior to retirement, a CGT of only 15% will apply.

3. Any taxable capital gains made within a Family Trust are passed to your personal income returns, taxed at marginal rates of between 0.00-45.00%. The average rate most taxpayers will pay is 30.00%.

CONCLUSION

Although there is a considerably higher cost in purchasing the property using SMSF, (primarily because of funding requirements), the initial, ongoing and CGT benefits from choosing a SMSF outweigh the short term initial expenses of funding and setup fees.

 

 

At GC Accountants we provide the professional advice you need to set up and administer your own fund and greatly simplify the process for you Contact Us

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