Celebrate your freedom with a well earned trip!

There are no hard and fast rules or simple tips and tricks when it comes to Self Managed Super Funds (SMSF’s). 

Each client’s situation is unique and requires careful review before answering question such as… should I consider setting one up?  How much do I need to have in super to make it worthwhile?  Where should I invest my super?  Are there any secret strategies I should know about?  Over the course of the next couple of blogs, we’ll be taking a look at a couple of fictional scenarios (based on real events) to give you an insight into how an SMSF can be part of a broader plan for your financial future.

Meet Nancy. Nancy runs a successful business, just like you. What Nancy doesn’t know is that with some relatively simple restructuring of her assets, she could significantly increase her net wealth over the next 10 years and retire much earlier than anticipated. After a joint meeting with her SMSF adviser and planner, she realises the substantial long term advantages in transferring the commercial property in her trust (used by her own business) to an SMSF.  She crunches the numbers, weighs up the risks/benefits and decides to go ahead with the transfer. Thanks to a well-executed strategy, she is able to completely eliminate any capital gains tax and stamp duty on the transfer to her SMSF. Additionally, her SMSF borrows to partly fund the property purchase with cash, which Nancy uses to pay out her home mortgage and clear some other non-deductible debts.  Within ten years the SMSF borrowings have been repaid thanks to lease income (tax deductible to Nancy’s business) and additional deductible contributions made by Nancy. At this time, Nancy sells her business for a modest sum but continues to lease the premises to the new business owner, paying no tax on any net rent income or future capital gains on the property by this time as her fund is in 100% pension phase. She celebrates her new freedom and heads off for a well earned trip to the Spanish Isles!