Superannuation
Superannuation Advice Perth
The tax benefits of superannuation and self-managed superannuation funds are well known. However, superannuation funds are also significant in estate planning and business succession.
At an elementary level, many families in business do not want to sell their assets to the next generation. Effectively the business will be “gifted” to the generation who has worked in the family business. This strategy requires that the exiting parents have enough wealth to retire well, benefit other family members and ensure that their spouses do not have financial concerns later on-on.
This is where superannuation is concerned. An adequately structured superannuation fund with sufficient assets will ordinarily be a cornerstone decision in whether the family business can be gifted or sold to the next generation.
Beyond the need for a family in business to be wealthy enough to transfer assets to the next generation – superannuation also offers a family in business unique opportunities. The ability for an SMSF to fall outside of the Superannuation Complaints Tribunal – can represent an opportunity for blended families with different interests.
Further, for families operating an SMSF, controlling a superannuation fund after death is essential. Binding death benefit nominations can assist some– and the control structured through trustees, successor shares, and the solvency of superannuation fund for lumpy assets are all important concepts that need holistic business, super and tax advice.
At Westcourt, we are focussed on superannuation advice without the conflicting involvement of investment management. Our SMSF specialists understand the estate planning impact of superannuation funds and structuring super funds within a family group to get the ultimate desired family planning outcomes while also considering the family business’s desired business objectives and business goals. And given our ability to consider offshore assets through our global network – it is the best natural choice to choose Westcourt for your superannuation and estate planning needs.
Frequently Asked Questions
In Australia, you can generally access your superannuation fund money when you meet one of the following conditions of release:
Retirement: You can access your superannuation fund money when you reach preservation age and retire. Your preservation age is between 55 and 60, depending on your date of birth.
Attaining age 65: You can access your superannuation fund money when you reach age 65, regardless of whether you are still working or not.
Terminal illness: If you are suffering from a terminal illness and have less than two years to live, you can access your superannuation fund money.
Permanent incapacity: If you are permanently incapacitated and unable to work, you can access your superannuation fund money.
Severe financial hardship: If you are experiencing severe financial hardship, you may be able to access your superannuation fund money in limited circumstances.
Compassionate grounds: If you have exceptional circumstances, such as the payment of medical expenses or the modification of your home for disability reasons, you may be able to access your superannuation fund money on compassionate grounds.
It’s important to note that accessing your superannuation fund money before you meet a condition of release may result in significant tax consequences and reduced retirement savings. Additionally, some types of superannuation benefits, such as death and total and permanent disability benefits, may be paid out without meeting a condition of release.
It’s important to understand the conditions of release for your superannuation fund and to seek tax advice from a tax professional like Westcourt if you are considering accessing your superannuation fund money.
In Australia, you are generally not able to use your superannuation fund to directly purchase a house. However, there is a government-supported scheme called the First Home Super Saver Scheme (FHSSS) that allows you to use your superannuation savings to help purchase your first home.
Under the FHSSS, you can make voluntary contributions to your superannuation fund and apply to have those contributions and associated earnings released to help purchase your first home. To be eligible for the FHSSS, you must be at least 18 years of age and have never owned property in Australia before.
The released amount can be used for a deposit on a home, or for other costs associated with purchasing a home, such as legal fees or stamp duty. The released amount is taxed at your marginal tax rate, less a 30% tax offset.
It’s important to understand the rules and requirements of the FHSSS, and to seek advice from a tax professional like Westcourt if you are considering using your superannuation savings to help purchase your first home. Additionally, it’s important to consider the impact that making voluntary contributions to your superannuation fund may have on your retirement savings and to weigh this against the benefits of using your superannuation savings to purchase a home.
Starting a superannuation pension in your self-managed superannuation fund (SMSF) can be a complex process, and it’s important to seek professional advice from a financial advisor, tax professional, or SMSF specialist to ensure that you are meeting all of your legal and regulatory obligations.
Here are the general steps to start a superannuation pension in your SMSF:
- Establish an SMSF: You must first have an established SMSF. If you don’t already have an SMSF, you can set one up by registering with the Australian Taxation Office (ATO) and obtaining an Australian Business Number (ABN) and a Tax File Number (TFN).
- Transfer assets into the SMSF: You will need to transfer assets, such as cash or investments, into the SMSF. The assets must be transferred in accordance with the SMSF’s investment strategy and the rules of the SMSF.
- Prepare a pension plan: You will need to prepare a pension plan that outlines the details of the pension, including the pensioner, the amount of the pension, and the payment schedule (at least one payment a year). The pension plan must be in writing and must be approved by the SMSF trustees.
- Commence the pension: Once the pension plan has been approved, you can commence the pension. You will need to calculate the pension amount, based on the pensioner’s account balance and the relevant pension rules, and make the first payment to the pensioner.
- Monitor the pension: You will need to regularly monitor the pension to ensure that it is being paid in accordance with the pension plan and the relevant pension rules. You will also need to keep records of the pension payments and ensure that the pensioner’s account balance is updated regularly.
It’s important to understand that starting a superannuation pension in your SMSF can have significant tax implications and that the rules and requirements for starting and maintaining a pension in an SMSF can be complex. It’s important to seek professional tax advice to ensure that you are meeting all of your legal and regulatory obligations and that you have a clear understanding of the impact that starting a pension may have on your retirement savings. At Westcourt we manage almost all of the above processes to simplify the matter.
It is illegal in Australia to intentionally avoid or reduce your obligation to pay the minimum level of superannuation guarantee (SG) contributions for your employees. The SG is a legislated minimum standard for employer contributions to their employees’ superannuation funds, and failure to make the required contributions can result in significant fines and penalties.
However, there are some steps you can take to manage your superannuation costs, including:
- Reviewing your payroll processes: Ensure that your payroll processes accurately reflect the hours worked by your employees and the correct SG contribution rate.
- Negotiating with employees: You may be able to negotiate with your employees to become employed through a contracting agency, which can reduce the amount of SG contributions you need to make.
- Reviewing your superannuation fund arrangements: Consider salary packaging more non-reportable fringe benefits which do not attract superannuation on those benefits.
It’s important to understand that these options may have implications for your employees and to seek professional advice from a Hr advisor or tax professional like Westcourt to ensure that you are meeting all of your legal and regulatory obligations and that you have a clear understanding of the impact of any changes to your superannuation arrangements.
