TAX NEWS - June 2010

Australia Tax: Planning for your retirement

The primary purpose of a superannuation fund is to save for retirement.

However, according to Sandie Allan, of nation-wide business adviser RSM Bird Cameron, there are major tax advantages that can be achieved through superannuation funds.

Self-managed super funds for small business owners, including farmers, she said, were particularly helpful.

Sandie, a supervisor in the agribusiness section at the company's Ballarat office, said super funds could be used to achieve taxation benefits, even for those who were cash-poor.

"For those who receive less than 10 per cent of their assessable income from income as an employee, a tax deduction can be obtained for any concessional contributions made to a superannuation fund," Sandie said.

"The advantage of having a self-managed fund is that the contribution does not have to be made in cash.

"So for those people who are cash-poor, a transfer of shares, farm land or business real property into the self-managed fund can also yield a tax deduction.

"This really is win-win - we can save for our retirement while obtaining a tax deduction, without contributing any cash."

Sandie said the asset contributed to the self-managed superannuation fund would now legally be owned by that fund.

However, the contributor would be the fund trustee and therefore still maintain control of the asset.

For anyone needing tax deductions, self-managed funds can be a great option.

"In particular, for farmers who are cash-poor but asset-rich, this option may be more suitable than Farm Management Deposits," Sandie said.

"The reason is, if assets are contributed, no cash has to be sacrificed."