|
David Hall, Tax Specialist -
Townsville
Superannuation - It Makes Sense
|
Gayle asks: I have been
investing in shares for some time now and have
built up a little nest egg. A friend of mine
says that I should have set up a superfund and
held the shares in there. What is the benefit of
doing this?
Gayle, if you hold the shares in your name any
income you earn is taxed at your marginal rates.
Which for most people will be 31.5% or even as
high as 39.5% or 46.5%. Compare this to super-funds which are taxed at 15%, or even 0% when you
reach age 60 (pension phase). If the superfund
receives franked dividends, this could result in
minimal tax or even a refund.
Ideally, you could hold assets in the superfund
until the fund is converted to the pension phase
where income and capital gains become tax-free.
Compare this to you holding the assets and
making the large capital gain at your marginal
tax rate.
Owning your own self managed superfund can give
you the piece of mind that you have direct
control over the investments, no commissions
payable or none of the commercial fund
management charges. Your own fund can receive
both non-concessional (after tax contributions)
and concessional contributions (employer or
self-employed contributions).
The down side is getting started, with most
experts saying that you should have at least
$200,000 in the fund. This is because you will
incur annual costs of between $1,500 to $3,000
on such things as: accounting, tax return
preparation, auditing fees and the ATO
supervisory levy. You will also incur initial
set-up costs of about $2,500. So clearly, having
your own superfund means being prepared to
invest some serious money into the fund. But you
need to remember that the monies held in the
superfund are not funds that are freely
available for you to use. In fact, there are some
strict rules that apply to superfunds and the
consequences for breaching the rules can be
severe.
Tracey asks: I want to start up my own
superfund; how can I quickly get the most funds
into the superfund?
Tracey, if you are under 50 you can only make
maximum yearly concessional contributions of
$25,000 or $50,000 for those over 50 (only for
the next three years). This limit also includes the
compulsory super contributions from your
employer. However, you can also make
non-concessional (after tax contributions) of
$150,000 per year, or if you are under 65 you
can bring forward the next two years' contributions
and pay a total of $450,000 in non-concessional
contributions. So this means in the first year
you could accumulate as much as $475,000 or
$500,000 in contributions. However, concessional
contributions are taxed in the hands of the
superfund at 15%. So this amount will be reduced
to $471,250 or $492,500. If you were eligible
for the Government’s co-contributions scheme you
could have accumulated a further $1,000.
Additionally, a small business person could
contribute a further $500,000 (retirement
exemption) or $1 million (15-year rule) through
the small business capital gains tax concessions
on selling their business or business assets.
If you have a tax question, please drop me an
email at:
David.Hall@whk.com.au
This advice is general in nature and readers
should seek specialist advice before making
financial decisions. WHK Pty Ltd ABN 84 006 466
351
Liability limited by a scheme approved under
Professional Standards Legislation other than
for the acts or omissions of financial services
licensees. |
|
Port
Douglas Office:
21-23 Warner Street,
Port Douglas Qld 4877
Ph: 1300 852 044
Fx: (07) 4099 4344
Cairns Office:
232-240 Mulgrave Road,
Cairns Qld 4870
Ph: (07) 4052 3222
Fx: (07) 4051 8827
Townsville Office:
22 Walker Street,
Townsville Qld 4810
Ph: (07) 4722
9555
Fx: (07) 4722 9599 |
Kirwan
Office:
73 Thuringowa Drive, Kirwan QLD 4817
Ph: (07) 4723 2777 Fx: (07) 4723 0921
Charters Towers
Office:
28 Bow Street, Charters Towers Qld 4820
Ph: (07) 4788 2900 Fx: (07) 4787 4169
Hughenden
Office:
29 Brodie Street, Hughenden Qld 4821
Ph: (07) 4741 1100 Fx: (07) 4741 1211 |
|
