Self Managed Super Funds

A Grade Tax Accountants are able to assist with the establishment of Self Managed Superannuation Funds for those people wanting to take control of their superannuation investment. We have helped many clients including those wishing to borrow within their SMSF to purchase investment property.

We can also assist with explaining the tax advantages associated with Self Managed Superannuation Funds and assist you to comply with your ongoing obligations as a Trustee of a Self Managed Superannuation Fund. A key responsibility is the provision of audited Financial Reports and Tax Returns for the Fund.

Tax Effective Investments in Super

Superannuation has the potential to be a very tax effective investment, and is one of the best vehicles to fund retirement. But what are some options to consider?

Employees: Salary sacrificing into super. To ‘salary sacrifice’ means to contribute before-tax income, or to swap your salary for increased employer super contributions. This means that it is possible to avoid paying your own Marginal Tax Rate (or your income tax rate) in favour of the super rate of up to 15%. When you salary sacrifice your income into super, this type of super contribution is only taxed up to 15%. On top of this, salary sacrificing effectively reduces your assessable income – this could mean pushing your assessable income into a lower tax bracket and consequently paying less overall tax outside of super as well! For example, John is on a $90,000 salary (on a 39.5% Marginal Tax Rate (MTR). By salary sacrificing 20% of his income into super, his taxable income will reduce to $72,000, and income taxes paid will decrease by $6,470. 

Self-employed: Claim your super contribution as a tax deduction. Since 1 July 2007, contributions for self employed individuals are 100% deductible but with limits of $25,000 in this 2013 financial year.

If you are considering a contribution to super, ask us at A Grade Tax about the most beneficial timing and strategy for you.

SMSF Establishment Statistics

For the year ended June 2012 new Self Managed Super Funds (SMSF) establishments were 37,174. That is 39% higher than last year. Another 17,500 new funds were created during the 6 months to 31st December 2012. Now Australia has 496,028 SMSF with 945,207 members. 

By December 2012, a total of $474 Billon dollars were invested in SMSF assets of which $150 Billion were invested in listed shares, $135 Billion in cash and term deposits and $71 Billion in residential and non-residential property. These three sub-asset classes represent 75% of all investments.