SMSF Borrowing

Recent Changes

As discussed previously (see SMSF benefits) superannuation is the most tax effective investment for retirement. SMSF now have the ability to borrow. This means that superannuation, particularly self-managed superannuation have become the asset ownership structure of choice to build retirement wealth.

The change arises from a review by the Government of the use by SMSFs of installment warrants. As a result, the Superannuation Industry (Supervision) Act 1993 (SISA) was amended in September to permit the use of borrowing similar to installment warrants for any asset that a SMSF could otherwise invest in.

These new powers are in section 67(4A), which enables SMSF borrowing to fund the acquisition of an asset on the following conditions:

  • Recourse of the lender against the SMSF is limited to the asset itself.
  • The asset is an asset the SMSF could otherwise legally acquire (if it had the funds).
  • The asset is held on trust for the SMSF.
  • The SMSF acquires a beneficial interest in the asset from the outset, and a SMSF has the right to acquire legal title on making one or more payments.

 

Growing Your Retirement Wealth with Hudson Gore

There are a number of substantial benefits from SMSF borrowing.

Your wealth will grow using:

  • The power of leverage (using other people’s funds to grow your funds).
  • The power of compounding (because your super is preserved all income & capital returns are invested back in your fund).
  • The power of negative gearing (the costs of borrowing are tax deductible to your fund, which means even lower rate of super tax).
  • The benefit of low or zero tax in retirement (you can take a regular income stream or a lump sum free of tax over age 60 in retirement).

 

How We Help

At Hudson Gore we will assist you in growing your retirement wealth from the “start to the finish”.

We will:

  • Give you detailed, written advice on establishing a SMSF, how to structure the fund, what investments best suit you and how much you will need for retirement.
  • Then establish a SMSF for you with the appropriate legal structure set up within the fund.
  • Make the required investments.
  • Monitor the investments as they accumulate while you are working.
  • Establish income streams (pensions) or that most suited for you in retirement or while you are “transitioning” to retirement.
  • Look after your financial wellbeing in retirement.

 

How to get Started

Contact us and receive an overview of your current situation and assess how “far along the road” you are in your retirement planning. We have some sophisticated forecasting tools that can help you see what you need to do to ensure you are heading for a financially secure retirement.

We aim to empower the individual to achieve their life goals through innovative financial solutions

Level 3, 54 Foveaux Street Surry Hills NSW 2010
PO BOX 1899 Bondi Junction NSW 2022
Ph: (02) 9211 0111
E: services@hudsongore.com.au

 

234 Marius Street Tamworth NSW 2340
PO BOX 319 Tamworth NSW 2340
Ph: (02) 6768 5527 Fax: (02) 8569 2382
E: ian.cameron@hudsongore.com.au

Pin It on Pinterest