SMSF is an unyielding success story. Commanding a peculiar amount of investor frenzy, it has come to represent about 32% of the total Australian Super pool worth $1.6 trillion. Apart from being a near-guarantee of decent retirement, SMSF is also a ladder towards building a powerful retirement nest egg; aimed at making your post-retirement journey more than ‘decent’.
6 ways SMSF can benefit you
SMSF has many advantages. Some of the features that it has is completely absent in big pool funds. Let us discuss a few benefits.
- SMSF gives you great amount of liberty in choosing your investments and also offers you flexibility to change investment strategies.
- If you own a business premise courtesy of SMSF and it is held under an arm’s length lease agreement, you can add a good deal to your Super balance.
- You can let your Super fund borrow money from you and this debt amount can be altered into non-concessional contribution over a period of time by forgiving the impending debt. It is needless to mention that you mustn’t go beyond your upper ceiling of non-concessional contribution. The lending amount has no upper ceilings and all that must be looked into is the nature of the lending. In as clear terms as possible, the loan should be commercial in nature and follow the protocols of an arm’s length transaction.
- Even if you sell the business on a later day, holding the business premise can keep an additional income stream alive for you. In this sense, it is a gift that keeps on benefiting you.
- If you have a commercial property in your name, you can get it transferred so as it comes under the ownership of SMSF. This way, you can reduce the stamp duty a great deal (sometimes bringing it below $500).
- If you qualify for income tax concessions, you can sell off the property owned through your SMSF without having to pay a cent of capital gains tax. Great offering knowing how CGT can kill!
It is not without reason that SMSF is such a huge success story. These benefits only add to its stature of being the blue-eyed baby of investors.