You should never invest just for the tax benefits, unless the cashflow knocks your sox off look elsewhere. The tax benefits should only be the icing on the cake. Kind Regards non recourse
Just to correct and clarify this. When establishing the SMSF, it is the company (the corporate trustee) which applies to the ATO:- (a) to elect for the fund to be registered with the ATO as a superannuation fund; (b) for a tax file number for the fund (TFN); and (c) for an Australian Business Number for the fund (ABN). This must be done within 60 days of the fund being established (that is 60 days after the trust deed is executed and the first money is put into the fund). It is best for the company to be established as a "special purpose" company. This results in:- (a) no need to lodge its own tax returns; (b) reduced ASIC annual review fee (currently $43). On the question of tax returns, the company and its directors have obligations to ensure that fund keeps proper books and accounts which are audited every year and that tax returns are made on the fund's behalf.
I used to - losing more than 50% of my average tax return in order to get paid an extra $40 per week wasn't worth it in my opinion. Bloody annoying too - its basically a credit card with no cash facility. In hindsight, and now I don't use one any more, its merely another way to get the uneducated masses to move away from any form of physical trade, its completely electronic. I couldn't even check my balance via an ATM. No possibility of getting cash out either. It aint all its cracked up to be thats for sure!
If you have a SMSF with Employer Contributions coming in then I think SS is a very powerful tool to accumulate a good base early on in the life of the SMSF. The earlier you can grow the base the better IMO.It then gives you a larger number of options as to how you want to drive your fund in your 50's when you fund balance really starts to grow. You could use that extra contribution to buy PM in your SMSF in a way better tax effective manner rather than buying PM in total after tax dollars. 20 years goes very quick.
Be VERY careful with salary sacrifice - a number of staff at a former employer of mine were caught out by this trap. Unless you negotiate that any salary sacrifice is in ADDITION to your normal 9%, the employer can choose to count your sacrifice TOWARDS the 9%, and only pay the difference. Totally screws the employee over, and it's legal.
i think ifyou're not close to retirement age SMSF is probably a bad way to go. Once Gov takes other ppls super they are probably going to look around and see if theres anyone left to take from. Just because you invested in physical they could make a quick law banning physical or requiring at begining 50 % to be in shares etc. If you're 60 + i'd consider it because maybe just maybe they wont take it in the next 5 years
It's a brave person who thinks that their superannuation, will be made available to them, in 20 or so years.
20 years ago many where saying the Ozone layer would dissappear over Australia. Some say Silver will be go to the moon over the next 20 years?
I have never heard of this however point 6 in the link below maybe the situation you refer to? http://www.superguide.com.au/superannuation-basics/salary-sacrificing-10-super-facts-you-should-know At any rate the link has some good basic advices on SS that may assist.
Well my esuper bank account is open but i havent got my letter from esuper to say i can use it yet, so the waiting game continues.
What GP is indicating is different from point 6 on that link. Do you have a reference for that GP. I've never heard or come across that before and I don't think it is correct. Employers are required to pay a compulsory 9%. SS contributions are a different thing all together.
Yes I was confused when I read that post from GP.I cant see how that would be legal.I thought maybe that example in Point 6 of the link may have been similar to the situation he was describing? The penalities on Employers who are late with Super payments are very high as with short payments.The fines can easily bankrupt a small business that has stuffed it up.
Unfortunately it is legal and the ATO confirms this in their examples in the publication... This thread has more details and a link to the relevant publication
More like point 7 in that link although it is not expressed very clearly - certainly not as clearly as the example on the ATO's site - but basically the same thing ie an employer is entitled to count the salary sacrificed component towards their SG amount and also to pay that employer contribution on the lower (i.e. salary-sacrificed) amount
Thanks for the link XB - very interesting. Every time I've dealt with this the employment contract specifies pre sacrifice amounts for SGC. I always thought that was superfluous to the contract but it seems it is very important. Edit to add - rather than reading the example in the thread I should have taken the link. That is the non-profit section of the ATO web site. Most of the information in there relates only to not for profit organisations. I am very interested by all of this. I am going to do some more research to determine if this applies to all organisations or only not for profit. I'll post back when I find something.
Nope - the same example is given in the business section. Very, very interesting. Thanks again GP and XB http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/38336.htm&page=6&H6
