The New Superannuation is What it Says—Super!

Australians are about to enter a new era in superannuation. Super options are changing significantly within the next four months, so now is definitely the time to have a close look at your super opportunities. The new regulations are intended to make super a much more attractive means of saving for retirement. This represents a once-in-a-lifetime opportunity that all eligible investors should definitely investigate.

Previously there were aged-based limits on how much you could contribute to superannuation, but after the 1st of July anybody can contribute up to $50,000 to their super annually. On the 1st of July if you are over 50 you will be able to contribute even more - up to $100,000. And, importantly, at 55 for the first time it will be possible to access super while you are still working.

At sixty you will be able to contribute a maximum of $450,000 once every three years or $150,000 in any one year Under the new rules, at 65 you can continue to contribute to super provided you are working at least gainfully employed on a part-time basis where you work at least 40 hours in a continuous 30 day period in that same financial year.

Unlike the previous super regulations (which required retirees to start to withdraw their super), the changes will enable you to leave your money safely in your superfund.

So what is the big attraction of getting your money into super? It is simply that profits earned by your super fund are taxed at a low 15%, and capital gains are taxed at an even lower rate of 10%. Plus, if you are over sixty, all amounts paid out of super either through a pension or a lump sum payment will be tax-free. This means that there is no tax penalty for you when you access your super. You can access it whenever you want. And, if you are a retiree with the hope of longevity, there is the added advantage that you can keep your money in your super fund as long as you like.

Have you heard of the one-off opportunity to deposit up to $1 million dollars into your super? Between now and the 30th June, 2007, you can contribute up to $1 million and after the 1st of July a further $450,000 per person. This allows a couple to put almost $3 million into super - a big opportunity for those who are planning to retire in the near future If you decide to sell your business, a real bonus exists as you can roll up to $1 million of the proceeds from the sale of your business into super with no contributions tax to pay!

With all these funds shifting into super, many people are encouraged to start thinking of what they can do with all their money in super. If you prefer to invest in property rather than shares there are some basic rules for superannuation fund investments.

• Super funds are set up with the principle intention to preserve and grow the benefits for retirement of each of the members of the fund.
• Super funds cannot borrow as to do so would be risking the money already in the fund.
• Superannuation funds are able to invest in property but only with commercial property can there be any connection with the owners of the super fund.
• All transactions must be at arms length. That means you can not you cannot rent a property to a related personal party except to a business.

So if you are a lover of bricks and mortar investments rather than merely shares how can you invest in property and still have a complying super fund that allows you to be taxed at only 15% on the profits of the fund?

The answer is your super fund can invest in a unit trust which owns a property. The unit trust need not be a large unit trust but can be a personal unit trust which must be set up to clearly comply to the letter with the requirements of the SIS Act. (Superannuation Industry Supervision Act)

We are very excited about all these changes and hope you are, too!