Hi folks
Yep - back on this subject.
Trying to find a definitive answer - ATO is vague on their website, and hopeless by phone - and SMSF Accountant is away.
Hubby qualifies for transition to retirement when he hits 55 in 2 years (pre 30/6/60).
Looks like might be made redundant in 2 years.
He's not keen to go back on the PAYE roundabout, especially in a contracting industry at his age, and we are starting a business with a boutique cropping product - first planting next week. Unfortunately, the cropping won't replace the income in the timeframe.
However - on Monday we are going to look at a commercial IP situation that is throwing off around 15% net (before tax) - or, if we outsource some of the ongoing maintenance work - around 10% net (before tax) - and would replace hubby's current income plus some.
Now - do we buy via the SMSF or outside?
We want to buy in the SMSF as not wanting to take on any more debt at this stage - and the fund has nearly enough to cover the entire purchase costs. Would need a small loan that would be paid out from takings in the first 2 years.
The question is - when he turns 55, and qualifies for transition to retirement, does he have to put any monies into the SMSF to be able to take a regular payment out ... ie ... transition the money ... or can he just take a regular payment?
We'd like to take the 10-15% as weekly or fortnightly payments.
Or - if that not possible at 55 - are we allowed to charge the IP a weekly management fee as the current owners are doing - and retrieve most of the profit that way?
I guess - the question I'm really asking is - after 55 can he self-funded retire and draw regular payments on his SMSF - or charge the IP a management fee? Prefer first option.
I know we cannot take a lump sum - and that's fine.
Can anyone with experience answer - or point us in the direction of getting a definitive answer?
We are also aware that SMSF's don't like "eggs in one basket" - so may have to use some of the profits to build up the share/cash side again - or keep some as shares/cash and take out a bigger loan - and keep the auditor happy.
Thanks
Yep - back on this subject.
Trying to find a definitive answer - ATO is vague on their website, and hopeless by phone - and SMSF Accountant is away.
Hubby qualifies for transition to retirement when he hits 55 in 2 years (pre 30/6/60).
Looks like might be made redundant in 2 years.
He's not keen to go back on the PAYE roundabout, especially in a contracting industry at his age, and we are starting a business with a boutique cropping product - first planting next week. Unfortunately, the cropping won't replace the income in the timeframe.
However - on Monday we are going to look at a commercial IP situation that is throwing off around 15% net (before tax) - or, if we outsource some of the ongoing maintenance work - around 10% net (before tax) - and would replace hubby's current income plus some.
Now - do we buy via the SMSF or outside?
We want to buy in the SMSF as not wanting to take on any more debt at this stage - and the fund has nearly enough to cover the entire purchase costs. Would need a small loan that would be paid out from takings in the first 2 years.
The question is - when he turns 55, and qualifies for transition to retirement, does he have to put any monies into the SMSF to be able to take a regular payment out ... ie ... transition the money ... or can he just take a regular payment?
We'd like to take the 10-15% as weekly or fortnightly payments.
Or - if that not possible at 55 - are we allowed to charge the IP a weekly management fee as the current owners are doing - and retrieve most of the profit that way?
I guess - the question I'm really asking is - after 55 can he self-funded retire and draw regular payments on his SMSF - or charge the IP a management fee? Prefer first option.
I know we cannot take a lump sum - and that's fine.
Can anyone with experience answer - or point us in the direction of getting a definitive answer?
We are also aware that SMSF's don't like "eggs in one basket" - so may have to use some of the profits to build up the share/cash side again - or keep some as shares/cash and take out a bigger loan - and keep the auditor happy.
Thanks