Mulcahy & Co SMSF Taking Control of your Financial Future eBook by getsmartdesign

SMSF Taking Control of Your Financial Future

ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree

What our Clients say GRILL’D BALLARAT When starting up our franchise business, we found the convenience of being able to utilise both the legal and accounting services of Mulcahy & Co to be an enormous help. Mulcahy & Co were able to offer a seamless and personalised service that ensured our franchise start up process moved quickly and efficiently whilst ensuring all important details were covered.

Aaron Bones and Marietta Thompson www.grilld.com.au TUCKER FAMILY - MAROONA We have been dealing with Mulcahy & Co since 2006. “The first meeting we had with Chris was like a breath of fresh air”, Joe and Kathy recall. They have a genuine interest and knowledge of farming that has helped us grow with confidence. Regular management meetings keeps us all informed and on top of things. Being able to access the full range of services at Mulcahy & Co made our succession and estate planning process relatively straightforward.

BEV & HAYDN HOWLETT After raising their family, Haydn and Bev are now enjoying life as self-funded retirees. “Thanks to the good advice and guidance from Mulcahy & Co, we are now able to enjoy our retirement without having the stress of worrying about our finances. As retirees, we are financially secure and able to live the lifestyle we were accustomed to before retirement, but with more time to enjoy holidays, travel and leisure activities. Always greeted with a friendly smile, the professional team at Mulcahy & Co continue to make us feel comfortable and at ease, welcoming any questions we might have. With the SMSF department, Financial Planning,

Accounting and Legal all available at Mulcahy & Co, it’s a “one-stop shop” with the benefit of the specialists all working together to ensure all of our needs are met.”

Haydn & Bev Howlett Clients since 2003 DRAFFIN TRANSPORT Draffin Transport specializes in bulk transport, both local and interstate and is based 40km west of Ballarat. “We have been extremely fortunate to have been an original client of Mulcahy & Co. and continued our business together over the past 18 years. With their professional, personal and caring attitude our business has been very successful.” “The team at Mulcahy & Co. keep us up to date with all new changes that could effect our business. We feel privileged to have personal attention in a professional and approachable way”.

Kaye and Howard Draffin – Draffin Transport EVOLUTION KITCHENS & CABINETS MARYBOROUGH Maryborough based, Evolution Kitchens & Cabinets, specialise in the manufacture of kitchens and cabinet making. Evolution Kitchens & Cabinets currently employ four staff and prides itself on exacting workmanship, exemplary customer service and attention to detail in every transaction with clients. Evolution Kitchens & Cabinets has been with Mulcahy & Co since 2003 and openly credits the trusted professional relationship as contributing to the continued success of the joinery business. “We appreciate the personal attention we get at Mulcahy & Co, at any time we can speak with whoever we need to and believe the support and advice allow us to be responsive in our business.”

“There is a certain piece of mind you get when you know your financial affairs are being well cared for and that you can get advice when you need it and more importantly we can rely on that advice to be correct every time.” “The fact that all departments work together allows us to get on with our business knowing that in the background our Lending and Financial Planning needs are being met by the professionals at Mulcahy & Co.”

Peter and Shelly Davies www.evolutionskitchens.com.au BAKERS DELIGHT - WENDOUREE “We really like the fact that all of our business matters can be addressed in house, we use all four departments of Mulcahy & Co and these departments communicate effectively with each other to gain the best possible outcome for our business...”

Barry and Susan Browning Clients since 2003. VOYAGER - BALLARAT & RICHMOND “Mulcahy and Co treat our business just like it is their business, we get close personal attention, from all the different departments of Mulcahy and Co, that is efficient, reliable and responsive...”

Paul and Jeanne Thomson www.voyagerinteriors.com.au HOCKING STUART - BALLARAT & DAYLESFORD “Mulcahy and Co look into our business from an external point of view which allows them to be a voice of reason with a no nonsense and easy to understand approach...”

Tony Douglass and Tim Valpied Clients since 2003. www.hockingstuart.com.au

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree

Welcome & Overview

Presenter Faye Douglass This document provides a brief outline of the advantages of holding investment assets in a self managed superannuation fund (SMSF). At Mulcahy & Co our business is set up so that you can access the advice needed in these important areas. We have experts in all areas of Accounting & Taxation, Financial Planning, Lending, Legal and Information Technology to provide proactive, ongoing assistance. When looking at the options to accumulate and generate investment assets and income we talk a lot about superannuation. The reason for this is that superannuation is taxed at a lower tax rate compared to individual tax rates. By investing via superannuation and taking advantage of the lower tax rate, less tax is paid allowing more funds to be invested. This helps to sustain the longevity of your investment assets. The tax concessions available to superannuation once retirement (or transition to retirement) age is reached are even better with potentially no tax being paid on investment earnings including capital gains. So by having an investment plan that involves superannuation there can be significant tax advantages at all stages of life - whilst working and accumulating investment assets, the transition phase between working and retirement and once full the full retirement stage is reached. By paying less tax, more cash is available for investment assets to be accumulated and more income is available to retire with. For further information on SMSFs contact Faye Douglass, Mulcahy & Co on 03 5330 7200 or info@mulcahy.com.au or join us for an information night on 10th Feburary, 2016 at 6pm to discover the benefits of a SMSF.

Seminar Details SMSF Taking Control of Your Financial Future WHEN: Wednesday 10th February, 2016 TIME: 6PM WHERE: Mulcahy & Co 300B Gillies Street North Ballarat VIC 3355

Faye Douglass *Please note that the following information should be considered general in nature and before acting on this general advice a detailed analysis of your situation would need to be undertaken.

SMSF Specialist, Accountant

ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree | 3

Taxation Rates A superannuation fund whilst in accumulation phase has a tax rate of 15% on taxable income and 10% on capital gains. The tax rate reduces to 0% (nil) on investment income once a member enters pension phase (see below). Taxable income for superannuation purposes includes investment income and concessional (tax deductible) superannuation contributions. On this basis the tax rate for superannuation can be advantageous compared to individual tax rates. Tax on superannuation income can be summarized as follows: Details Accumulation Phase Investment income & concessional contributions Capital gains tax for assets held > 12 months Pension Phase Concessional contributions Investment income, including all capital gains

Tax on this income 15% 10% 15% 0%

For the 2015/16 financial year the individual tax rates are as follows (excluding 2% Medicare levy): Taxable income $1 - $18,200 $18,201 - $37,000 $37,001 - $80,000 $80,001 - $180,000 $180,000 and over

Tax on this income Nil 19c for each $1 over $18,200 $3,572 plus 32.5c for each $1 over $37,000 $17,547 plus 37c for each $1 over $80,000 $54,547 plus 45c for each $1 over $180,000

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree

Preservation Age Your preservation age is the date you can access a pension from superannuation and move into the pension phase within the super fund. Once a pension commences it is also the date your superannuation fund can have a 0% (nil) tax rate on investment income. The preservation age depends on your date of birth as follows: Date of Birth Before 1 July 1960 1 July 1960 - 30 June 1961 1 July 1961 - 30 June 1962 1 July 1962 - 30 June 1963 1 July 1963 - 30 June 1964 From 1 July 1964

Preservation age 55 56 57 58 59 60

Contribution Caps Although it is an advantage to contribute income and assets to superannuation, there are limits on how much can be contributed each year to superannuation by an individual. This highlights the need for planning to maximize the use of superannuation for your retirement. The main contribution limits for the 2015 / 2016 financial year are as follows: Contribution cap Concessional contributions (Tax deductible) Concessional (under age 50) Concessional (over 50) Non concessional contributions (non-tax deductible) Non concessional Non concessional (bring forward option)

Amount $30,000 $35,000 $180,000 $540,000

*Maybe subject to legislation changes.

It is important to understand that the concessional contribution cap includes the amount of superannuation contributed by an employer or tax deductable super contributions if you are selfemployed.

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree

Self Managed Superannuation We recommend utilising a self managed superannuation fund in circumstances where clients are looking to take greater control and a greater interest in accumulating investment assets for retirement. Once you reach preservation age a SMSF enables the transition process to access a pension (and tax free investment income) to be relatively straight forward. We also find that people are more willing to make additional superannuation contributions (such as through salary sacrificing) when they have greater input into where the money is being invested.

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree

Some of the advantages of a SMSF are as follows: Greater control and flexibility with investment options.

The ability to borrow money to purchase investment assets.

A greater range of uncomplicated investment options and opportunities such as:

A fee structure that is clear and understood with no hidden commissions and management fees.

• Direct shares • Residential property • Commercial property (including farm land)

The ability to manage your own money

• Term deposits • High yielding cash accounts • Wholesale managed funds Australian & International shares

Providing a greater understanding of your underlying investments

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree

In Terms of Establishing a SMSF, we can assist with completing the following: Establish the SMSF trustee company and SMSF deed. Complete all necessary Tax Office registrations. Establish a bank account (cash management account). Review personal insurances held within existing superannuation and in individual names and set up the insurance in the SMSF as required. Organise to rollover existing super balances and consolidate into the SMSF. Establish a share broking account (if applicable). If borrowing within the SMSF: • Assist with locating an appropriate investment and provide a tax and cash flow analysis of the investment utilising borrowing. • Establish the necessary legal documents to enable the SMSF to borrow. • Provide lending options and organise the finance.

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree

We currently look after a large number of SMSFâ&#x20AC;&#x2122;s. This includes not only the taxation, administration and compliance matters, but also establishing and maintaining direct share portfolios, managed funds, fixed interest and direct property. We see the utilisation of a SMSF strategy as a sensible way of reaching financial goals, utilising a much more efficient fee structure, accessing a broader range of investment options and accessing borrowing to help boost retirement savings.

Conclusion: We trust that this detailed summary provides an overview and explanation of SMSFs. It is recommended that an appointment is made in order to provide advice tailored to your personal circumstances. If you wish to discuss in further detail please do not hesitate to contact Faye Douglass at our office.

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree

Notes

SMSF Taking Control of Your Financial Future

ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree | 10

Notes

SMSF Taking Control of Your Financial Future

ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY MULCAHY.COM.AU

P 03 5330 7200 | info@mulcahy.com.au | 300B Gillies Street, Wendouree | 11

Are you Financially Secure? follow our...

10 Steps to Success

10. Investment Plan

1. Goals & Objectives

An Investment Plan will increase your asset base, while focusing on preserving your capital and managing your risks, to meet your personal and financial goals.

Picture yourself in 10 years time... Where do you want to be? How are you going to get there? Being clear on your goals ensures you can develop a strategy to achieve them.

FINANCIALLY OU SEC Y E U AR

9. Superannuation Plan

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Many people miss out on the enormous tax benefits of superannuation. A Superannuation Plan will ensure you have a strategy to produce greater wealth at retirement.

2. Estate Plan “What will happen when I’m gone?” Only assets owned in your name are covered by your will. Your Estate Plan protects your family from the potential threats that your Will does not.

3. Risk Plan

8. Business Plan

Your Risk Plan addresses whether you need to save or insure to protect your family’s financial security in the event of an injury, accident or death.

Your Business Plan is the main s ource of your wealth. The 5 Drivers to Business Success are the key to developing a business which will help you achieve your goals.

7. Retirement Plan

4. Asset Protection Plan

Retirement is setting the date when you choose to stop work. Your Retirement Plan details the income and assets you need (in addition to superannuation) to retire and outlines the steps to get there.

An Asset Protection Plan makes sure your assets are owned in the right names or entities so you limit the risk of them being exposed to creditors.

6. Debt Plan A Debt Plan ensures your assets aren’t over exposed to debt and structures your debt to maximise tax deductibility of the interest.

5. Taxation Plan A Taxation Plan structures your affairs so that you legally pay the least amount of tax and retain more of your income.

Mulcahy & Co

P 03 5330 7200 info@mulcahy.com.au Level 1, Suite 4, 300B Gillies Street Ballarat, Victoria, 3355

MULCAHY.COM.AU

ACCOUNTING | FINANCIAL PLANNING | LENDING | LEGAL | INFORMATION TECHNOLOGY