Are you a Business Owner?
Do you have an SMSF (Self Managed Super Fund)?
Thinking about increasing your Wealth?
Do you need an accountant that thinks outside of the box and has your future in mind? Did you know that unlike residential property, you can purchase commercial property that is in use by a fund member through your SMSF without break the rules?
What does that mean?
If you’re a business owner you can buy the commercial property in which you do business in your SMSF. Unlike residential real estate, which is not allowed to be owned or occupied by the SMSF or any related parties. Commercial Properties can be owned by the SMSF and occupied by related parties business or businesses.
Why would you want to do that?
Putting the asset into a lower tax environment can be good for your SMSF and be a part of your group’s wealth creation strategy. It puts the asset into a protected environment to provide income for your future retirement. Why pay someone else’s mortgage and build their wealth, when you can look to build your own with the right advice and solution for you and your business.
What you’ll need
You’ll need a fair amount of wealth in your super fund. Banks will usually require a 35% deposit for your own commercial premises. As mentioned earlier, you’ll also need some solid advice as to whether or not this particular strategy is right for you from your Trusted Business Edge Accountant and your financial advisor. Their maybe other strategies that can be used, but you will need to discuss these in person to see if your a suitable candidate and it fits in with your strategic solution from your current position.
What are the benefits?
Well as with any asset in your super, there are potential long term tax and superannuation benefits which can create more wealth for you and your family. Aside from this, within an SMSF the interest on the loan may be claimed, capital gains when you sell may be significantly minimised, especially if you’re in pension mode. If you are in pension phase the fund may pay no tax at all on the rental income or future capital gain if you decide to sell it.
The door might be closing
An interim report of the Australian government’s inquiry into the financial system is calling for a review of guidelines around leveraging this strategy (source: http://fsi.gov.au/files/2014/07/FSI_Report_Final_Reduced20140715.pdf )
So time may be of the essence. If this is an opportunity that you think might be good for you, contact us today for better advice for a better financial future by talking to Business Edge Accountants. Talking to your Accountant and Financial Planner will be required for working out it’s suitability for your future success and choosing strategies to ensure your wealth plan is going to be suitable to your business and tax strategy.
This article is provided as general information only and does not consider your client specific situation, objectives or needs. It does not represent accounting advice upon which any person may act or act upon in the future. Implementation and suitability requires a detailed analysis of your specific circumstances are required.