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That can work both ways and depending on the amount leverage you employ,CBAwent from just above $60,then back down too mid 20$,big difference from a piece of paper too a block of land..willair..BV
Say with $50 you buy one share of CBA
instead of that
you can buy IW of cba for $25 each
basically you put your $25 down as your own money and borrow another $25 - so with your $50 you own two shares worth $100 - but you owe $50 to the bank - same as property principle
since you have two shares - and not one - you get double the dividend and double the imputation credit.
Not all employers offer this, and different employers allow different things to be packaged, because there are a lot of complex rules about FBT and so on. Your employer would also have to pay you what it doesn't pay in super due to the lower 'salary'.
Alex
BV
since you have two shares - and not one - you get double the dividend and double the imputation credit.
Hi All
I would like to explore this further , so how do I find someone who has the knowledge and expertise to advise me on a SMSF ?
I'm in sydney
stuart
few little add ons
SMSF will cruel your lending options big time, especially if u want a decent lvr, a moderate rate, or the flexiility to access the equity growth for external purposes.
Im not saying SMSFs dont have benefits for some, but this aribtary comparison isnt a reasonable one.
Just because a carrot and an orange are the same colour doesnt mean they are the same
ta
rolf
manoj said:The last thing you can do is put that $100K in your super fund - give that money to your dad or mum who is under 65 year old - and if you are 35 - dad and mum have to be at least 20 years older or about 55 years age - pick the parent who is not working - then mum or dad will contribute this $100K in a newly formed SMSF - as non-concessional contribution - this is called "Tax Free component" - the parent will sign a biding death nomination - which means on death - the money comes to you and not to other siblings etc - since the money is "Tax Free" component - when it is ultimately paid out to you - it will be tax free in your hands.
manoj said:Once dad is 65 and is eligible for Govt. Pensions - check the asset test as account based pension are included in assets - up to $252,000 of assets do not reduce your Govt Pension.
manoj said:This is a very complex issue and beyond the comprehension of your suburbia accountant - you will need a SMSF Specialist accountant who can be found on the website www.spaa.asn.au
manoj said:Dad contributes $300,000 to a SMSF - the SMSF pays $45K in contribution tax over the years - SMSF earns income - this income is not credited to any member account but to a "reserve account" - when dad dies - mum gets the balance of dads account + $45K from the reserve account as a Anti - detriment payment - this then creates a $300,000 deduction in the SMSF - this loss is carried forward - so when contribution are made by son in future years - no tax is paid by the fund. This loss in the fund can be carried forward for ever.
manoj said:Once i am 60 years - i withdraw my super tax free and pay $530 to the bank and keep the balance - do a spreadsheet - you will find that your cost is half - the reason is simple - instead of paying 30% tax and then paying off the non-dedutible home loan (like my dinner example) - you are paying half the tax in super - then cumulating both - income in the fund and interest on line of credit - but at the end of the day - home loan is paid but you paid half the tax or in other words paid half the interest rate.
manoj said:"Migrants Handbook : How to be a millionaire in less than 10 Years of landing" between phone calls
manoj said:Rich people do not pay tax - they use the Cash-Box Strategy to hold their income
manoj said:"Run your profitable business with a proper tax structure with your bank manager wife"
manoj said:You are getting confused with the preservation age which is 55 years (when you can access your super) and pension age which is going to be moved from 65 to 67 (when Govt starts to pay you Govt. Pension).
manoj said:Say with $50 you buy one share of CBA
instead of that
you can buy IW of cba for $25 each
basically you put your $25 down as your own money and borrow another $25 - so with your $50 you own two shares worth $100 - but you owe $50 to the bank - same as property principle
since you have two shares - and not one - you get double the dividend and double the imputation credit.
rugrat said:And maybe I am missing something important I just cannot see any advantage in using an SMSF to purchase propert unless you are close to that retirement age anyway, and have significant funds in the super fund.
BV said:No because to get $100 cash you will need to earn $171 before tax.
So with Manoj's thinking we are better off borrowing the $100 to pay for the dinner (and pay 6% ongoing interest) and put our 171 pretax $ into our super instead.
If we are 50 years old by the time the borrowed $100 has increased to $171 we would have become 60 and would have access to our super so we can pay back the $100 loan.
What is amazing is this thread has had 80 odd replies and about 1600 views in less than 2 days! like no other on this site...
You obviously have not seen some of the "hot" threads in the past. You aint seen nothing..... This thread doesn't compare really.
Which means there is still a lot of demand for knowledge on purchasing property with SMSF - like the good old days when very few had property NG'ed and then every one jumped on the band wagon - SG (super gearing) is even more sweeter - but it will take time to convert ...
all those who can prove they made a profit after taking inflation into account will be treated with a "Dinner for Two" worth $100 with my compliments (Sydney members only) ....
BV & JIT
How to pay no income tax on rental income & pay no tax on contributions
Assume that you have a $100K from selling your investment property - or you can withdraw from your own home and say you are 35 years old and between yourself and wife have $50K in super - since the kids are young and the two of you earn only $80K (spouse works part time $20K and the other $60K) - 9% is $7200. (Since the two have been working on this wage for the past 10 years - you should have at least $50K in joint super)
Step 1 - create the fund
The last thing you can do is put that $100K in your super fund - give that money to your dad or mum who is under 65 year old - and if you are 35 - dad and mum have to be at least 20 years older or about 55 years age - pick the parent who is not working - then mum or dad will contribute this $100K in a newly formed SMSF - as non-concessional contribution - this is called "Tax Free component" - the parent will sign a biding death nomination - which means on death - the money comes to you and not to other siblings etc - since the money is "Tax Free" component - when it is ultimately paid out to you - it will be tax free in your hands.
Step 2 Roll over your super in your SMSF - balance $150K
Step 3 - Purchase IP with installment warrant
Step 4 - Put dad on pension
Step 5 - The negative will be about $7200 including depreciation - when contributions are made - 9% - no tax is paid
Step 6 - if there is more negative - salary sacrifice - dad can withdraw and give you the money to you tax free as his pension will be tax free.
This strategy assumes that dad does not have a tax problem and is under 65 years old and is not eligible for Govt. Pension
Once dad is 65 and is eligible for Govt. Pensions - check the asset test as account based pension are included in assets - up to $252,000 of assets do not reduce your Govt Pension.
Manoj
I have 6 free minutes for any one who understands that it costs $10K to own an Investment property and not $5850! But remember, i am NOT in practice and i can not do any accounting work for you..BTW the consulting fee is $440 Incl. GST
Stuart start your outline as below
"I understand that it costs $10K to own a property and not $5850 as per your example, my situation is .....give age / family income / assets / liabilities and current super balances....
....
Looks to me like someone is just trying to drum up business, but not succeeding.
Cash box strategy is for those who do not have an employer...
manoj said:And those who want to buy properties out of super - please come back to this forum to tell us how much CGT that they have paid and if they made any money from the whole transaction - ie from buying / paying stamp duty / losing money every year / at the time of selling paying agents commission and paying CGT = all those who can prove they made a profit after taking inflation into account will be treated with a "Dinner for Two" worth $100 with my compliments (Sydney members only) ....