Recently I was involved in the sale of a piece of land for a reasonable profit that will settle in a few months. Land was purchased under a company name with husband & wife as directors & main share holders.
Sometime ago I recall reading an article that implied capital gains tax on the sale of an asset could be reduced if part of this amount was directed into a superannaution fund. Note husband & wife are self employed.
Can someone assist in clarifying if capital gains tax can be reduced via superannuation contribution ? or by any other means..thanksHi
Basically, the gain from the sale of the land will get added on to the taxable income of the company.
If you were to make superannuation contributions (to a certain limit) these could be deducted from the taxable income of the company.
If you believe that superannuation is the appropriate vehicle for you to put your money into, it can be very effective from a tax point of view. I assume that your company does nothing other than hold property, so you are probably pretty limited in tax planning options. I would also assume that the reason you set it up in a company is because the two of you are on higher incomes.
So your options are (given my limited knowledge of your situation) put money into superannuation to reduce the taxable income, or pay tax at 30%, leave the profits in the company (until such time as you and your wife are on lower incomes, then take fully franked dividends from the company ) and use the profits within the company for other investments.
Just remember, once it is locked away in super, it is there to stay!
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