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Reducing Your Tax

You can use the Australian Superannuation System to minimise your tax and get tax free income - No matter what country you live in!

Contact our experts to find out more: enquiries@directadvisers.com.au

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Did you know that Australian Superannuation Funds pay a 15% maximum rate of tax on their investment income?

Did you know that it is possible to reduce this rate of tax to zero?

Did you know that Australian Superannuation Funds pay only 10% tax on their capital gains?

Did you know that Pension Funds set up within the Australian Superannuation System pay NO tax on their income and capital gains?

Did you know that it is possible to receive a totally tax free income by using a Pension Fund set up within the Australian Taxation System? The actual tax that you pay, will however be governed by the taxation law applicable in your country of residence.

Did you know that you do not have to be an Australian resident or citizen to obtain many of the tax advantages of the Australian Superannuation System?

Here is an example of how an investor could benefit from using the Australian superannuation system:

Assumptions

Investment: $200,000

Investment Returns: Balanced portfolio average return of 4% income plus 4.5% capital growth compound p.a. Income tax rate: 50%

Present Age: 45

Retirement age: 65

Option 1 - Superannuation

Approximate value at retirement: $950,000 (due to lower tax paid within superannuation fund).

Option 2 - Non Superannuation

Approximate value at retirement: $700,000 (due to higher tax paid outside of superannuation fund)

Allocated Pensions

If the above amounts are used to purchase an allocated pension at retirement, the following outcomes can be projected:

Option 1 Invest $950,000 into an allocated pension

Minimum Income: $60,500

Maximum Income: $117,300

Tax free component of income = $58,600

Balance of income may attract a 15% tax rebate if you have an Australian Tax File Number (i.e. $8,800 on maximum pension)

An allocated pension fund does not pay tax on its earnings if those earnings are used to pay a pension.

Option 2 Invest $700,000 into an allocated pension

Minimum Income: $44,600

Maximum Income: $86,400

Tax free component of income = $43,200

Balance of income may attract a 15% tax rebate if you have an Australian Tax File Number (i.e. $6,500 on maximum pension)

An allocated pension fund does not pay tax on its earnings if those earnings are used to pay a pension.

Please note that the above calculations are approximate only and the actual rate of return will vary according to the investments selected and that taxation position of the individual investor. These calculations are based upon presently existing superannuation legislation and current Australian taxation rates.

As you can see there are substantial benefits from using the Australian superannuation system, both as a means of accumulating assets in a tax effective environment as well as by using an allocated pension as an investment vehicle in retirement.

Our experts can show you how to best utilise the Australian Superannuation System to minimise the tax you pay.

Contact us: enquiries@directadvisers.com.au