110. Make a Non-Concessional Contribution with the Proceeds of your Business Sale We recommend that you make a non-concessional contribution of $XXX to your YYY Superannuation Fund. As this is the sale proceeds from your business, you can use the small business provisions for making additional contributions to super. Benefits:
[15-year exemption] As you have held your business asset for 15 or more years, you will not have a capital gains tax liability to pay and the full amount of $XXX can be contributed to super without impacting the nonconcessional cap. [Retirement exemption] You will receive a capital gains tax exemption for up to $500,000 transferred into superannuation from your sale proceeds. You may still have capital gains tax to pay on the balance. Please seek specialist tax advice for more details. This contribution will form part of your tax-free component. This means that it will be tax-free on withdrawal, it will form the tax-free component of any pension payments and it will be received tax-free by beneficiaries upon death. Superannuation is not means tested for Centrelink payments until you reach age pension age.
Points to Consider:
[Under 75 super] As you are under age 75 you are eligible to contribute to Super. Please refer to the Super Flyer for criteria. You will not be able to access this money until you meet a condition of release such as retirement. [15-year exemption] The limit for the 15-year CGT exemption is $1,650,000. Any contributions in excess of this will count towards your non-concessional contribution cap. Normal rules apply and excess contributions may be withdrawn or they will be taxed at the highest marginal tax rate. [Retirement exemption] The limit for the retirement exemption is $500,000. Any contributions in excess of this will count towards your non-concessional contribution cap. Normal rules apply and excess contributions may be withdrawn or they will be taxed at the highest marginal tax rate. Non-concessional contributions can only be made if the super balance is less than $1,700,000. Due to the complexities in these options and further considerations around your business, we strongly recommend you seek specialist tax advice prior to acting on this advice.
111. Invest in a Portfolio via a Managed Discretionary Account (MDA) We recommend you invest in a portfolio of direct shares, via an MDA, as part of your wealth creation strategy. We recommend use of funds from your cash / investment account to fund the purchase of this portfolio. Details of actual share purchases are provided in the next section of this SoA. Benefits:
MDAs allow us to create and manage a portfolio of stocks that align with your investment risk profile and personal wealth objectives. MDAs provide timely reporting as well as access to investment research and market insights through the online portal. As your portfolio is designed specifically for you, we have flexibility in managing your dividends, tax payments and capital gains. By granting us a dealing authorisation, we can trade, acquire and dispose of investments on your behalf to keep your portfolio aligned to your investment objectives. Having direct control over the stocks within your portfolio allows us to time or stagger investment decisions in response to market conditions. Investing in direct shares will provide diversity to your overall investment portfolio. Australian share dividend income is tax-effective where franking credits are provided. You have the option to reinvest your dividend income back into your shares, reducing transactions costs as well as investing for further capital growth. Holding shares directly provides flexibility as you can sell a selection of individual shares as needed. It also provides flexibility to manage capital gains tax on the sell down of your portfolio. Corporate actions can take place swiftly on your behalf.
Points to Consider:
Investing directly into shares increases your exposure to market volatility. Capital growth and dividend payments are not guaranteed. Negative returns are likely where the value of your portfolio falls to less than what you start with.
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