Self-Managed Super Funds (SMSF), allow for more options and more control than a regular superannuation fund. This allows for some simple strategies that can significantly improve your retirement.

Self-Managed Super Funds allow for up to 4 members to be a part of the SMSF. This allows for greater purchasing power and lower fees as the members split the administration costs. This means that the tax savings strategies you adopt can benefit your partner, parents, friends, children or whomever you’d like to have in your Self-Managed Super Fund.

Property Investment & Capital Gains Tax

Within a self-managed super fund, any income (rent) or capital gains made by your investment can be tax free in your retirement.

For example, Bob is earning $60,000/year. He isn’t sure whether he should buy an investment property using the equity in his house or using his super.

The house Bob is looking at is $400,000. Bob plans to sell the property in 10 years on his 60th birthday to pay out his mortgage.

If the house grows by 5% each year it would be worth $651,558 in 10 years’ time.

If Bob purchases the property using the equity in his home, he will have an assessable capital gain of $125,779, this is because a 50% discount applies because Bob owned the property for over 12 months.

Income Tax payable on $125,779 is $37,943.

If Bob purchases the property through an SMSF, he wouldn’t have to pay any Capital Gains Tax on the property and the $37,943 could be used to help Bob retire a little earlier.

Self-Managed Super Funds allow for plenty of other tax savings strategies and the flexibility allows for you to design your own retirement.