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Using super to buy business premises

Discussion in 'General Business Chat' started by RoboHaus, 23rd Nov, 2016.

  1. RoboHaus

    RoboHaus Member

    Joined:
    8th Sep, 2016
    Posts:
    7
    Location:
    Sydney
    Hey,

    We are exploring the possibility of using our super to buy a premises for our business and would be interested in;

    - hearing other peoples experiences
    - pros / cons
    - views on trust structures
    - advisers (legal, accounting, financial) that people found valuable and would recommend to others (i.e. us)

    Regards
    Michael
     
  2. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    24th Aug, 2016
    Posts:
    158
    Location:
    Sydney
    @DaveM @pinkboy do I recall correctly that you guys have experience with this?
     
  3. Terry_w

    Terry_w Active Member

    Joined:
    30th Aug, 2016
    Posts:
    37
    Location:
    Sydney
    many advantages to having the SMSF own business property.

    On the legal side:
    1. asset protection on the event of bankrutpcy of the indidivudal or insolvency of hte trading company
    2. Estate Planning - can pass your interest in super outside of your will
    3. stamp duty concessions could be available to transfer existing property into a SMSF
    4. New land tax threshold separate to the individual in some states
    5. Friendly landlord unlikely to be any disputes.

    On the tax side
    1. 15% income tax inside a SMSF compared to 30% in a company or 49% individual
    2. 15% CGT or 10% after 12months
    3. Potentially 0% income tax and CGT when in pension phase.
    4. Potential debt recycling strategy of selling exisitng property to SMSF which borrows. Funds released can go to pay down non deductible debt.

    etc
     
  4. pinkboy

    pinkboy Member

    Joined:
    29th Aug, 2016
    Posts:
    10
    Location:
    Mackay
    Thanks @Simon Hampel .

    I wrote a rather comprehensive write up over on PC here: My Commercial Purchase.

    11 months on, its by far my most valuable asset. Its tax effectiveness, personal wealth building, and compatible business premises qualities is a no brainer.

    I believe @DaveM has a similar story where he provided a solution to his premises for his business to both build personal wealth, while running his business without the worries of lease renewal etc that comes with being a tenant.

    pinkboy