Peter Caddy Hans van Heuven
Partner & C.E.O. Partner
NOVEMBER 2010 NEWSLETTER
UPDATE FROM THE C.E.O.
Father Christmas has arrived in town again, how time seems to fly. However, it is also a good time to reflect on where we were 12 months ago, where we are today, and where we may be headed into the future.
There will be issues to manage in the short to medium term, given interest rates are going up, the Australian dollar moving higher and inflation looking to increase as well. This does not mean there will not be opportunities for all of us in business to grow and better our futures.
We are personally looking to grow our business, and have started looking at where we want to be in 10 years and therefore can make decisions along the way with our end goal in mind.
Now for some news regarding our team members:
We have had three of our male team members getting married in the last three months - Adam and Abbie, Rob and Kaarina and John and Lisa have all tied the knot recently, so congratulations to them all.
Rob has also finished his post graduate Chartered Accountant studies.
It is my pleasure to introduce three new team members since our last newsletter:
Jade started with us in April and is working with us full time while studying at Uni via external study arrangements. Jade is also a handy netballer, playing A grade level in the Barossa Light Gawler league, and was runner up in the best and fairest award for her club this season.
Tom started with us in August and is still studying at Uni and working part time with us. He plays footy and cricket, while holding down the secretarial job with his cricket club.
Onnley is an experienced accountant, and commenced with us in August as well. She is married with two young children, and works with us 4 days a week, Tuesday to Friday. Onnley is looking forward to Xmas and the holidays with her two young children.
Those of you that have been in lately will have noticed that Lena is back with us after her maternity leave. Lena is now working part time - Wednesday to Friday.
We are always looking for new business clients, so if you have any friends or business colleagues looking for an accountant that can help them with their business, wealth creation or superannuation, please feel free to pass on our name. We offer an obligation free first interview at no cost to any prospective client.
Finally, on behalf of everyone at Symes Accountants, we wish you and your families a Merry Xmas and happy and prosperous New Year.
USING YOUR SUPERANNUATION TO BUY
YOUR BUSINESS PROPERTY
Most financial commentators would agree that superannuation is a highly effective vehicle through which to accumulate wealth and enjoy a tax effective retirement income stream.
A strategy which a number of our business clients have implemented involves setting up their own self managed superannuation fund (SMSF) and using their super fund to purchase a share of a commercial property from which they run their business.
There are a number of variations and strict rules apply, but a common example is outlined below:
Mum and Dad have run their business operations for a number of years from leased premises. Their children are growing up, they’ve built up substantial equity in their home and they are starting to think seriously about funding their retirement in the next 5 to 10 years.
They’ve accumulated say $200,000 in superannuation and the opportunity comes up to purchase the property from which they run their business for say $600,000.
They set up their own SMSF and roll their $200,000 into this new fund. The SMSF purchases a one third interest and they use the equity in their house (and possibly other assets) as security to purchase the other two thirds interest in the business property.
Mum and Dad’s business now leases the business property from themselves and their SMSF. They’ve got great tenants! Assuming the annual rent is $45,000, the SMSF would be entitled to $15,000, being its one third ownership interest.
If they also contribute say $25,000 as contributions into their fund, suddenly their SMSF has about $40,000 cash which it can use to purchase an increased ownership interest in the property.
If the SMSF now owns say 40% of the property (instead of 33%), it will receive 40% of the rent (instead of 33%). Mum and Dad’s SMSF can use its share of the rent and any additional super contributions to keep increasing its ownership interest in the property. In time, the SMSF can own up to 100% of their commercial property.
Mum and Dad’s choices in retirement include receiving a highly tax effective pension from the rent the SMSF receives, or their SMSF can sell the commercial property to invest the funds elsewhere. With appropriate planning, any capital gains the SMSF makes on the appreciation of the property can be entirely tax-free!
LAND TAX
The Land Tax amendments outlined in the Mid Year Budget Review are as follows:
. The land tax tax-free threshold has increased from $110,000 to $300,000, effective from 1 July 2010
. The thresholds above $300,000 from 1 July 2010 are adjusted so those affected will receive up to $1,245 in relief to what they currently
pay
. All land tax thresholds will increase by movement in land values from 2011/12 for ongoing relief and
. There will be an exemption for commercially run residential care facilities from land tax, to be applied retrospectively to the 2009/10 financial year.
XMAS CLOSURE
The Office will be closed from 1pm Thursday 23rd December, 2010 to 8.30am Tuesday 4th January, 2011.
As always, if you have any queries regarding any of these articles, please contact your team accountant.
Visit us online at www.symes.com.au
