Situation
Mr and Mrs Kane own three commercial properties in their own names. As the loans on the properties were paid down, they find themselves with higher net rental income and therefore higher income tax payable. They have a SMSF with only a small share holding. They are also of retirement age and would like to plan for retirement.
Action
Together with the financial planner:
- We worked out the capital gains tax issues to ensure that the capital gains of $680,000 was reduced to nil tax payable by using CGT discounts and retirement exemptions.
- We utilised the maximum contributions limits for the clients
- We minimised the stamp duty issue with the transfers
- We adjusted the transfer of the assets over two financial years to ensure that legal limits for contributions were not exceeded
Results
- A commercial property is effectively transferred to the SMSF without paying any tax on the capital gains of $680,000
- The asset is protected within the SMSF
- The SMSF in the pension phase is able to receive rent tax free and distributes to the clients as tax free pension.
- The personal income tax of the clients are effectively reduced
Tax and accounting services provided:
- Self Managed Super Fund and retirement planning
- Asset protection
- Tax and accounting services
- Capital gains tax planning advice
- Effective tax planning and tax minimisation
Alliance partners services provided
- Wealth creation and financial planning
