We just sold a Ip with about a 58k capital gain. My accountant wants me to put 50k into starting our own super fund with his firm and roll over another 40k into it as well to reduce the amount of tax we will pay. he did the white board cenario and the difference is 14k less tax we will pay if we do. I don’t have a problem with paying tax as i know i have made a profit but my thinking is wouldn’t i be better off paying the extra tax even if i pay it off to the tax man and have the 50k for investing now . I have to go see him on monday so has anyone got any other thoughts or has been in the same situation. So i can throw them at him.
thanks
roboHow old are you?
Remember that you will not be able to get until you are 55(untill they change the law anyway)
CATA
Asset Protection Specialist
[email protected]super is for people that don’t know where to invest their money! It’s a passive investment!
Being an active investor means you can make more money quicker!
Whether you want to be active or passive is your choice! I prefer to be active, I don’t have a single cent in super, but at the same time, my money is working hard for me!
We buy properties in Adelaide. Immediate Cash Settlements, No Agent Fees.
[email protected]
phone 0412 437 582Hi Robo
I agree wholeheartedly with Dr. X.
It might also be an interesting question to ask your accountant where he would have you invest this super. And if and when he mentions specific super funds, ask him what up front and on going trailing commissions he will receive from these funds if he manages to “sell” them to you.
Good luck.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
I with Cata on this one. Locking your money away until you are 55+, with the Gov. changing the laws every single year (for example the Gov. just bringing in TAP’s, which is causing much confusion and headaches for investors), is in my mind not that great a deal unless you were making some spectacular return Or you could pull it out and invest into further RE purchases (i.e. setting up company and selling shares to the super fund, super fund gives company money to buy property) But then theres running the damn thing (paperwork, accountant fees, etc) and that costs money (so probably not worth setting up a new stax structure to save say $14K unless it was going to become a real part of your strategy and you were going to do multiple times over).
If you do decide to do it, I would recommend an index fund (like Vanguard for example) as they beat around about 80% of the so called experts year in, year out (their ratio rises to something like 90%+ over 5yrs). Fees are also very low too, and it’s rather liquid.
Hellman
Robo,
This really does depend on you age and how much you will have in your super fund. It’s probably not worth having a DIY super fund if the value of the fund is below about $200- $250K. Your 14K tax saving will be chewed up in Audit and management fees in about 5 years.
The problem with Super is that you loose the power of gearing. You either have the 50k working for as Super or you can have the 50k geared at 75-80% and have about 250k working for you not invested in Super.
Mal
Getting out of your comfort zone, can help you become comfortable
What are your goals? Sounds to me like you want to keep on investing, therefore the choice is an easy one…
Just remember you may be able to avoid 14k in tax but can you out perform that in the long term by multiplying your investments???
Perhaps there are better ways you can structure your investments in the future to reduce your tax bills. ie trusts. Or using partners name.
My opinion TAKE THE MONEY…. Bank what you got till you find your next deal!Thomas
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