tram-track01dan

Maximising your superannuation benefits

Superannuation is one of the most tax effective ways of funding your retirement

Roger's story

Background

Roger owned and operated a small manufacturing business in Melbourne’s eastern suburbs for over 20 years. When he first came to see us, he told us he wanted to retire in five years, and also ensure that his retirement nest egg was maximised. Rogers’ personal financial assets included the factory that the business operated from (valued at approximately $450,000), a share portfolio valued at $270,000, superannuation of $385,000, and cash of $75,000.

Result

We recommended to Roger that he establish a self-managed superannuation fund (SMSF) and then:

  • transfer his existing superannuation savings into the new SMSF
  • transfer the ownership of the factory to the SMSF by way of a contribution. This realised a small capital gain that his accountant was able to eliminate through some tax planning (small business tax concessions). There was no stamp duty on the property transfer.
  • Transfer the share portfolio to the SMSF over a period of three financial years this is still in process and a capital gain is being realised in each financial year, however like the factory, this is managed and minimised. The transfer will be completed this year.
  • Invest $45,000 cash

Ultimately, Roger will have the majority of his personal financial assets invested in the extremely tax effective superannuation environment when he converts it into a pension income stream. His investments will be retained in a tax-free environment and the income he draws will also be tax-free. In the meantime until he retires, the investments are concessionally taxed.

Also, when Roger retires, if he is able to sell the business operation, he may be able to contribute the proceeds into the SMSF tax-free.

 

* Names have been changed to protect client privacy.

What to do next:

If you want to learn how to make the most of your SMSF?

Contact us today on 03 8394 0300, or email us at mfmadvice@hillross.com.au to organise a complimentary appointment with one of our SMSF Specialist AdvisersTM.

More stories tram track