NEWS – Putting the sale of a business into super – Watch the contribution caps!

NEWS – Putting the sale of a business into super – Watch the contribution caps!

NEWS – Putting the sale of a business into super – Watch the contribution caps!

If you have or will have proceeds from the sale of a business and want  to put them into super, be mindful and watch the contributions caps! An article in Money Management explains more

Small business owners who are planning on selling their business or business assets and using the proceeds towards superannuation free of capital gains tax (CGT) need to be aware of the recent changes to concessional and non-concessional caps, the SMSF Association said.

The association warned that even though the small business CGT cap rules had not been changed recently, such a move could have huge impact on their superannuation.

In general, the small business CGT cap allowed the capital earned on the sale of any small business asset up to $500,000 per taxpayer to be contributed to superannuation free of CGT or in case of the assets that had been held for more than 15 years the threshold would rise to $1.415 million for the 2016/17 financial year.

SMSF Association head of technical, Peter Hogan, said that once this tax-free contribution was placed in an SMSF using the CGT cap, these amounts counted as part of a member’s total superannuation account and were assessed accordingly in terms of eligibility for catch-up concessional contributions.

“So, although the small business CGT cap has been left alone by the legislation, small business owners need to carefully assess the impact of making such a contribution on the sale of a business or business asset,” he said.

“Ideally, any small business contribution should be made after any other contribution, especially where the small business CGT contribution will push account balances over the various account thresholds.”

He also encouraged small business owners to get advice from an SMSF specialist on how to maximize, in these circumstances, their retirement savings and the tax effectiveness of their SMSF.

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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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