Pros & Cons Of Arranging SMSF To Your Business Premises Without Thinking The Strategy

We actually love this strategy of Super Fund Outsourcing, but there are positives and negatives to this situation and you will need guidance from your legal, accounting and SMSF Specialist Advisor. Many owners of small to medium enterprises use this as an effective strategy but others do a half-baked job and leave themselves exposed.

SMSF Outsourcing

Pros:

  • Direct control of your super investments and a real understanding of where your money is invested.
  • The fund will pay only 15% tax on commercial rent paid
  • If the premises is sold no capital gains tax may be applicable once you are in pension phase and 15% or less if earlier.
  • You can be your own landlord with secured tenancy which allows you greater certainty when fitting out or installing equipment.
  • Keeps liquidity in the business to fund other costs.

Cons:

  • There are thousands of dollars in setup costs and there are sometimes higher fees involved in getting a loan through your SMSF.
  • If a member of the fund dies without the proper insurance in place the fund may have to pay out death benefits leading to a rushed sale of the commercial premises.
  • If sold to a third-party then there is a possible loss of tenancy to the business which could destroy it.
  • There are strategies that can be built to avoid the cons, it is best to speak to an adviser so that they can see what is best for your personal situation.
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About Tim Davidson

Tim Davidson is a Director of Connect Accounting Pty Limited an Australian company that provides secure and cost effective compliance and SMSF accounting and income tax services to Australian accounting practices and superannuation administration companies. Tim Davidson, Google Plus Profile - https://plus.google.com/116869855757893395606

Posted on August 25, 2014, in Accounting, outsource, Outsourcing, smsf and tagged , , , , , , . Bookmark the permalink. Leave a comment.

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