Jason Crofts Essentia Partners

Disclaimer None of this presentation takes into account your Individual Circumstances All information is merely factual and correct at time provided Please consult your advisor before making any decisions pertaining to SMSF’s

“SELF MANAGED”  Not for everyone  Review personal circumstances with an advisor  Ensure you want to be pro-active  Surround yourself with “good” advisors  Be aware of changing Legislation

“THE PHENOMONEN”  5 years to 2014/15 growth of 27% to 557,000 funds  Total balance of $576 billion at Sept 2015  Average balance grew to over $1M in 2015  experienced positive return of 9.8% in 2013/14 Source - ATO SMSF - A Statistical Overview (17 Dec 2015)

“THE BASICS”  No more than Four Members  All Members must be Trustees (Ind. or Corporate)  Requires Annual Accounts, Tax Return & Audit  Rollovers  Contributions

“CONTRIBUTIONS”  Concessional $30-35K depending upon Age  Non-Concessional ($180K per annum)  Non- Concessional ($540K 3 year <65)  work test over age 65

“TAXATION”  Income at 15%  Capital Gains (potentially 10%)  Retirement Phase (potentially ZERO)  Franking Credits Refundable  No pro-rata on period of ownership

“THE EXCITING STUFF”  Direct Investment Choice  Acquire assets otherwise unattainable  Direct Property (more to follow)  Acquire business premises  Purchase assets with “other funds”

 “INVESTMENTS”  Cash  Fixed Interest (eg Term Deposits)  Shares (Aust & Foreign – Direct & Indirect)  Property (Direct & Indirect)  Alternate (eg - hedge funds, infrastructure bonds)

“BORROWING IN AN SMSF”  Single Acquirable Asset  Property most common  Limited Recourse Borrowing Arrangement “LRBA” (Bare Trust Structure)  Residential Property (approx.75% LVR)  Commercial (approx. 65% LVR)

“BORROWING IN AN SMSF” - Example  Residential Property ($500K)  Rollover from Industry Fund ($200K)  Borrowing of $320K (purchase price + incidentals)  Rental Income & Contributions to repay mortgage  Debt potentially reduced at 85c in dollar

“RETIREMENT”  Lump Sum (potentially tax free)  Pension (potentially tax free)  Combination of Both  Death Benefits - spouses

“THE OTHER STUFF”  Minimum Balance to setup an SMSF  Annual & Setup Fees  Rollover “out of” SMSF  Binding Death Nominations  AFS Licencing

Questions Jason Crofts Essentia Partners