Session Two of our Tax Effective Investments seminar was presented by Jason Crofts of Essentia Partners, who delivered an in-depth commentary on some of the benefits of using a Self-Managed Super Fund to assist in preparation for retirement.

1. Jason Crofts
Essentia Partners

2. Disclaimer
None of this presentation takes into account
your Individual Circumstances
All information is merely factual and correct at time
provided
Please consult your advisor before making any decisions
pertaining to SMSF’s

3. “SELF MANAGED”
¡ Not for everyone
¡ Review personal circumstances with an advisor
¡ Ensure you want to be pro-active
¡ Surround yourself with “good” advisors
¡ Be aware of changing Legislation

4. “THE PHENOMONEN”
¡ 5 years to 2014/15 growth of 27%
to 557,000 funds
¡ Total balance of $576 billion at Sept 2015
¡ Average balance grew to over $1M in 2015
¡ experienced positive return of 9.8% in 2013/14
Source - ATO SMSF - A Statistical Overview (17 Dec 2015)

5. “THE BASICS”
¡ No more than Four Members
¡ All Members must be Trustees (Ind. or Corporate)
¡ Requires Annual Accounts, Tax Return & Audit
¡ Rollovers
¡ Contributions

6. “CONTRIBUTIONS”
¡ Concessional $30-35K depending upon Age
¡ Non-Concessional ($180K per annum)
¡ Non- Concessional ($540K 3 year <65)
¡ work test over age 65

7. “TAXATION”
¡ Income at 15%
¡ Capital Gains (potentially 10%)
¡ Retirement Phase (potentially ZERO)
¡ Franking Credits Refundable
¡ No pro-rata on period of ownership

8. “THE EXCITING STUFF”
¡ Direct Investment Choice
¡ Acquire assets otherwise unattainable
¡ Direct Property (more to follow)
¡ Acquire business premises
¡ Purchase assets with “other funds”

9. ž “INVESTMENTS”
¡ Cash
¡ Fixed Interest (eg Term Deposits)
¡ Shares (Aust & Foreign – Direct & Indirect)
¡ Property (Direct & Indirect)
¡ Alternate (eg - hedge funds, infrastructure bonds)

10. “BORROWING IN AN SMSF”
¡ Single Acquirable Asset
¡ Property most common
¡ Limited Recourse Borrowing Arrangement “LRBA”
(Bare Trust Structure)
¡ Residential Property (approx.75% LVR)
¡ Commercial (approx. 65% LVR)

11. “BORROWING IN AN SMSF” - Example
¡ Residential Property ($500K)
¡ Rollover from Industry Fund ($200K)
¡ Borrowing of $320K (purchase price + incidentals)
¡ Rental Income & Contributions to repay mortgage
¡ Debt potentially reduced at 85c in dollar

12. “RETIREMENT”
¡ Lump Sum (potentially tax free)
¡ Pension (potentially tax free)
¡ Combination of Both
¡ Death Benefits - spouses

13. “THE OTHER STUFF”
¡ Minimum Balance to setup an SMSF
¡ Annual & Setup Fees
¡ Rollover “out of” SMSF
¡ Binding Death Nominations
¡ AFS Licencing

15. Questions
Jason Crofts
Essentia Partners