Paul and Lucy, both in their early 40’s, are employed with a modest mortgage and an investment property that is negative geared. They like
property investment and are interested in buying an investment property through their superannuation. They want to accumulate more as
they are far off from retirement. They had the ability to add to their employment superannuation guarantee and salary sacrifice
$10,000 each in superannuation. They have $165,000 and $110,000 respectively in their retail superannuation funds.
We set up an SMSF with both of them as members and trustees of the PL Superannuation Fund.
We reviewed their insurance for ownership by the SMSF as the retail superannuation fund insurance would cease once we rolled the funds out.
We rolled over their superannuation from their retail superannuation fund to their SMSF.
The SMSF borrows money and holds the residential property via a Bare Trust. The fund borrows $350,000 from the bank to acquire a residential property with a value of $500,000.
The balance of the purchase price of the property is funded by existing cash in the PL Superannuation Fund.
Paul and Lucy plan to hold the asset until they reach pension phase. Any income derived from the property at that time will be
tax-free to their super fund, and no CGT will be payable when they sell it.
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.
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