Self-Managed Superannuation Funds (“SMSF”) have become an integral wealth creation tool for business owners.

SMSF’s offer a low tax environment which means higher after-tax re-investment of funds which will grow at a faster rate and produce greater wealth at the time of retirement for fund members compared to investments held outside superannuation that will be taxed at higher rates.

They also provide a greater range and flexibility in terms of investment choices including the ability to invest in direct assets such as listed equities or property and the ability to transfer ‘in specie’ your existing assets into your SMSF, if it is listed securities, managed funds or your business real property.

A SMSF can borrow under a limited recourse borrowing arrangement to acquire business real property from a related party of a member. Putting business real property into a low taxed or potentially zero tax environment can maximize wealth creation in the longer term.

Once the SMSF goes into pension mode, the net income of the SMSF becomes tax-free. The timing of sale of property within a SMSF can be appropriately planned to avoid any capital gains tax on capital gains made.

A retirement pension can commence as early as age 55 (depending on your year of birth) and a member can still continue to work or contribute to superannuation.

SMSF’s are a very flexible option for you to acquire wealth and provide for your future retirement needs. They should seriously be considered as the investment entity to grow your wealth.

Please contact Matt Schlyder matt@fwo.net.au for more information on how a Self-Managed Superannuation fund could benefit your business.