We recommend that you talk to an expert from Crea & Co about your Superannuation requirements, but in the meantime we have included some further, more technical information below to help you.

Concessional (tax deductible) contribution to a Superannuation Fund can be transferred to a spouse by:

• Splitting ETP payments (Eligible Termination Payments)
1. Taking advantage of receiving the lifetime lump sum low rate NIL tax payment threshold and recontributing this back to the Superannuation Fund as a non concessional personal (undeducted) contribution.
2. Rollback of existing pension into the Superannuation Fund and then commencing a new pension.
• Other strategies including:
1. Splitting Superannuation contributions to the benefit of a spouse.
2. Borrowing to purchase property with others.
3. Other tailor made strategies depending on individual circumstances.
• Purchasing a property. Depending on the circumstances this may be acceptable and can result in excellent benefits to a DIY Superannuation Fund, with opportunities for minimising both capital gains tax and taxation.

An example on how to utilise your Superannuation Fund money to buy property

1. Your Superannuation Fund buys a rental property for $250,000. Is it a proper investment for the Fund to have all of its assets in one property?

- The taxation office has answered 'yes'

2. The Superannuation Fund has only $125,000 available to buy the $250,000 investment property, i.e. 50%

- It can be purchased as tenants in common with someone else or others.
- This could include the trustee and/ or members of the Fund.
- These others could borrow on other assets, including the family home, to purchase the other 50%.
- The rental income and expenses can be split 50% to the Superannuation Fund and 50% to the others.

Note:

1. The others cannot borrow on the investment property to secure their borrowings, as Superannuation Fund assets cannot be borrowed on.
2. It could be 10% owned by Superannuation Fund and 90% by others, or 60% Superannuation Fund and 40% by others.
3. When the Superannuation Fund accumulates more money it could purchase more of the property from the other joint tenants, if it was business real estate (non residential property). It cannot do this if it is a residential property and the others are related.

There are other possible strategies including developing property depending on individual circumstances.

The business is carried on as a trust or Pty Ltd company. (There are different considerations for a partnership).

1. It owns a property value $300,000 that is used in the business.
2. Business income including wages is about $120,000 per year.
3. Superannuation Fund is formed and buys 20% ($60,000) of the property from the business by way of a Super contribution from the business operator.
4. The business operator claims a concessional (tax deduction) contribution for $60,000 each year for the next 4 years. Another $60,000 is paid until the property is purchased in full. (Note: more may need to be paid if the property increases in value over the period).

Note: Stamp duty and conveyancing fees must be paid each year the property is transferred.

Presume the business was a discretionary trust and half of the income was distributed each to husband and wife, so the taxable income was $60,000 each.

Commencing pensions

• Consider commencing a non commutable allocated pension over 55 while still working and salary sacrifice into Superannuation to reduce your tax to as little as 15%, while at the same time possibly becoming eligible for the $1,500 tax free government co-contribution subsidy.



• The Trust deed must be reviewed and possibly updated to ensure that the fund member can take advantage of this strategy.



• Intending Retirees
  
  People who are intending to retire can roll their Super into their own DIY Superannuation Fund and enjoy the benefit of DIY Superannuation. There can be tax and other advantages of doing this well before retirement.



• Commutations from pensions can have taxation consequences and need to be properly considered.



• Commutations of part of an existing pension into a non-taxable payment to the members and then the member or partner contributing to Super, and then commencing a new non-concessional pension, results in the taxable part of the pension being reduced.



• Special consideration should be given to the:
• Effect of partial pension commutation on Centrelink pension.
• Tax deductions available to a fund that pays out an amount from revenues in addition to the account balance of the members to dependants. (Anti detriment provisions, Section 279 D).
• Tax deduction to a Superannuation Fund paying out a death or total disablement benefit for an employed fund member. (Not applicable to self employed).
• The level of untaxed post component created by paying a death benefit with life insurance to a non dependant.
• Avoidance of capital gains tax in a pension paying fund when death of a member is near and or likely by realising assets prior to death.
• Risk insurance (life total and permanent disability) can be taken out, however trauma insurance is not suitable as it is not a tax deduction.
• It can be more effective paying for your risk life insurance through the DIY Superannuation Fund as your Fund obtains a tax deduction, whereas no tax deduction is available if paid personally.
• Concessional tax deductible Superannuation contributions for those between 65 and 75, and non concessional personal (undeducted) contributions can be made between 65 and 75 providing a person is eligible to make Superannuation contributions by meeting a work test.