Martin | Accountant First | Tax Adviser | Bookkeeping

The following case study relates to a real life example of how we helped Martin, achieve the following result

$30,000

Tax and stamp duty savings

$200,000

SMSF account savings per year

$1,480,567

Personal assets secure from tax liabilities and legal lawsuits

Whilst this is an actual example, all personal details have been changed, for confidentiality purposes.

Our clients

Martin became our esteemed client a couple of years ago. He is a practicing lawyer with his own firm established in the late 60s. His practice turnover is almost 1,000,000 AUD per annum. The premises of his business office are registered to his own name.

Martin was considering selling this property to clear his house mortgage and invest the rest in a viable business or SMSF account. He currently stood at 77,000 AUD in his super with a withstanding loan of almost 200,000 on his home loan.

Problems before approaching ‘Accountant First’:

Our client was paying more than 30,000 for his commercial property rental income, which was sub-leased to other offices.

If he sold his current premises, this would cause much disturbance o his practice and potential loss of clients and market.

In the event of our client being personally sued, there was a risk of the loss of his commercial property as it was registered under his own name.

The funds in the SMSF account were considerably minimum accumulating in a low tax environment.

Solutions suggested by ‘Accountant First’:

The first step suggested to Martin by our expert financial advisors, after complete evaluation, was the establishment of SMSF account to siphon the super funds for capital growth.

We helped organize the transfer part of the commercial property to his super funds keeping check that no extra taxes were instilled.

A limited recourse loan was established from the bank of about 200,000 AUD to complete the property transfer to his super account.

These funds were then used to pay off the remaining mortgage on his personal home rendering our client debt-free.

In order to further boost the balance of the super funds, our client was suggested to make the maximum allowed deductible contributions from his SMSF account.

Results after implementation of solutions:

Since adopting our recommendations, Martin have achieved the following:

With the transfer of commercial property to self managed super funds account, additional costs of stamp duty amounting to almost 29,000 AUD was eliminated.

The value of our client’s super account was considerably increased from 77,000 AUD to a handsome 295,000 within a period of 2 years.

With the maximum tax cap of 13% on super funds income, our client is currently saving around 25,000 AUD per year in surplus taxes.

With the transfer of the commercial property from his personal name to super funds, the property is now immune to any lawsuits or legal allegations against his personal name rendering asset protection.

The mortgage on the personal house is now eliminated with the loan from his super being cleared in about 6 years.

Whenever our client decides to retire, he can sell his property in the name of his super tax-free, saving hundreds and thousands of dollars in taxes.

With the major debt of his home being cleared, our client has now additional savings which he is considering to invest in side-businesses in order to increase his overall capital growth.

Post becoming clients

We meet with martin at least twice a year to monitor their progress towards their financial goals, as well as to identify additional tax and investment opportunities that may be available to them.

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