SMSF Basics – The tax benefits of investments in super

SMSF Basics – The tax benefits of investments in super

SMSF Basics – The tax benefits of investments in super

Placing  investments from outside your SMSF into your SMSF can produce significant results due to the tax benefits of super. 

For example if you have investments in your personal name valued at $300,000.  If you are on the top marginal tax rate of up to 49% that will be calculated on the income and capital gains generated by the investments.  Assuming income of 3% per annum give $9000 income – this could raise $4,500 in tax per annum payable on the income.  Worse still, assuming the investment doubles every 10 years (a generally accepted investment principle) the capital gains tax bill on sale would be approximately $70,000 ($300,000 gain by 49% with 50% Capital Gain deduction, rounded). 

Even if you plan on selling the investment, eventually the investment will be sold even if your beneficiaries after you die, sell it, as the tax bill will still be there.  By transferring the investment into your SMSF (noting certain restrictions), the tax on the annual investment income will fall to $1,350 per year (super tax is 15%, a tax saving of $3,150 each year) and to $0 after you commence a Pension (a tax saving of $4,500 each year).  In addition there will be no tax on the capital gain in your SMSF if the shares are sold after you commence a Pension.  This can equate to a tax savings exceeding $100,000 depending on the period viewed!

Got questions? If you want experts who have years of helping others, without the hype – then call for a FREE strategy session today and also get your FREE Expert Guide – Self-Managed Super and You top right hand side above.

If you have any questions, why not give us a call – it’s FREE also! No obligation.

0407 361 596, Paul.


About SuperBenefitnews

Self-Managed Superannuation Service Providers in Australia. SuperBenefit provides a wholistic SMSF assistance, education and administration service continuum - 1. “assistance” is help of whatsoever nature where our overall SMSF experience and knowledge enables us to provide assistance/help without any legal (or “license”) limitations. 2. “education” involves providing knowledge through teaching, coaching and mentoring about all matters SMSF, including (but not limited to) investment issues such as equities and property, 3. “administration” encompasses all admin aspects of legally required SMSF trustee and member record keeping including (but not limited to) audit and ATO matters. In keeping with our key point that SuperBenefit does not provide Financial Advice, where issues arise from 1, 2, and/or 3 above Indicate a need for a legally authorized provider (such as a Financial Adviser) and the client does not have their own service provider, the client can utilize SuperBenefit’s ‘Connect Assist’ … SuperBenefit, in itself, does not provide Financial Advice, but it does provide the wherewithal for great SMSF service. WE do not provide Financial Advice or any other service that requires a legally authorized provider. However, where such advice or service is required we have our ‘Connect Assist’, a SuperBenefit resource we use to connect clients to a Licensed Advisor or other legally authorised service provider. Call us 0407 361 596, no obligation FREE Connection call to see how we can help you!
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