Capital Gains Tax
Capital Gains Tax (CGT) is effectively 50% of the gain. So, for example if you make $100,000 capital gain you are only taxed on $50,000.
This does depend on the entity you are investing through. Income splitting or asset protection could also change this equation. What’s clear, is that good taxation advice can save you thousands. BWD can help.
Borrowing through an SMSF
Capital Gains Tax can be a deterrent to property investment. Have you considered using your SMSF to purchase a property? You can use the existing cash available or even borrow as you would as an individual to purchase that investment property or business premises. We can explain and simplify the complex process required to borrow through an SMSF including:
- Bare Trust and Trustee
- Which bank to approach to borrow
- We can recommend your legal team
One of the advantages of borrowing through an SMSF include a CGT tax rate of 10% while working and 0% when retired. Compare that to a potential tax rate of 24% when investing in your own name.
Yes, there is the disadvantages. The biggest being that the funds are locked away until you retire. This strategy can form a major part of your retirement plan and help you reduce tax!