Superannuation is still one of the best ways of saving, with the most attractive tax options, says Morrows director superannuation services Murray Wyatt.
“There has been a lot of hard work done on the front end of taxation with such things as FBT, negative gearing and tax-effective products,” he says.
“However, superannuation is still a very viable way to build wealth.”
White says the 15 cents-in-the-dollar contribution rate still makes superannuation a tax haven,” Wyatt says.
“Undeducted contributions are a powerful tool and planners should be moving from the individual concept to the family concept.”
The key to using superannuation now is to get tax-free deductions for the spouse, he says. This also applies to securing a tax-free income in retirement rather than a lump sum.
“An allocated pension fund is not taxed on capital or revenue and there is a 15 per cent rebate on income stream.
“These undeducted contributions can be very powerful when it comes to assessable income before tax.”
Wyatt says there are two types of quality pensions ( the life expectancy pension with a fixed term and the self-managed fund.
“The big advantage of the life expectancy pension is that it can be rolled-over into a similar product after death,” he says.
“The self-managed fund is a new tax vehicle that has become very sophisticated in the resourcing of a pension strategy.”
Wyatt says the self-managed fund also allows the client to undertake a lot more strategies than they can achieve with a larger fund. This can be useful with estate planning and achieving tax concessions for dependants.
“Planners should use superannuation to maximise wealth,” he says. “They should also use superannuation rather than a master trust as that vehicle is not so flexible in both control and tax options.”
