One of my properties is part owned by my SMSF and part my wife and I, we have heard we can put our share into the super fund as an undeducted contribution, what exactly does this involve as I believe it will help reduce taxes, after all we can’t borrow against this property anyway.
ASB Alpine
ASB Alpine,
Super fund tax is a flat 15%.
Before you go putting the property into your smsf be aware of limitations to transactions between a smsf and related parties, ie yourself. Also, do you own the share of the property in your personal names or through a unit trust? You may already be going against the in-house asset rules?
Once the property is in the smsf you can’t get it or it’s funds out until preservation age, maybe 65?
An undeduced contribution is not a tax deduction to you, so why would you do it? How long do you have until you can access your super?
There will probably be CGT implications of transferring your share into the SMSF.
Ross dont want to correct but there are a few things in your post which are actually incorrect:
Super fund tax is a flat 15% – In the case of CGT where an asset has been held for 366 days the Tax is reduced to 2/3rd of the prevailing rate i.e 10%.
Preservation age is currently 55 but this is set to progressively increase for people born after 30th June 1960.
ASB also mentions that he already parts owns a property so we must assume that this investment was made prior to the transitional rules in 1999.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Thanks, Richard for clarifying my comments, although the transitional rules do expire in the near future, 2008 is it?
Looks like I opened a can of worms here, sounds like there may be issues with the joint ownership.
My wife and I own 58% of the property and the Super fund 42% and there are no borrowings against the property.
As the property has super fund involvement we can not borrow against it hence the option of making it 100% super fund owned through an undeducted contribution.
Well thats the current thinking anyway.
Oh the property was settled in 2004
ASB Alpine
ASB
Mhhh 2004 I am suprised you have not had an audit issue with this todate.
I would suggest you talk immediately to your Accountant or Fin Planner about the joint ownership structure.
Dependant on the figures once the property is sold and your own personal income then certainly an undeducted contribution is worth considering.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
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