In this time of global financial instability, investors and retirees face a unique combination of tax and wealth preservation challenges. We have an extensive track record assisting our private clients with tax planning, superannuation and retirement, investment structuring and estate planning.
At Baumgartners we invest in our client relationships to help achieve their wealth creation and preservation objectives. We do this by ensuring our technical knowledge, processes and systems are cutting edge and by pro-actively identifying issues that might affect our clients. We take great pride in always being accessible and responsive. Our goal is to build lasting and genuine relationships with our clients, many of whom are current or former business owners. These are some of the key areas we focus on.
Taxation
Investors and private clients are understandably concerned with optimising their taxation outcomes. We are experts in ensuring our clients’ affairs are structured so as to minimise the tax burden and continuously invest in our team so that they are always at the cutting edge of tax planning.
Entity Structuring
Correctly structuring our clients’ investment affairs is critical to achieving their taxation, asset protection, succession, and wealth creation objectives. Flexibility is also important in order to adapt to changing regulatory and economic environments. Structuring is an area that requires considerable expertise and experience, and a careful weighing of competing objectives, to deliver the right result. Our team has considerable experience structuring professional businesses across a range of industries.
Self-Managed Superannuation
Superannuation planning generally, and SMSFs in particular, are an area of expertise at Baumgartners. Having one of the largest SMSF audit teams in the country helps ensure that our clients receive the best advice and access to the latest superannuation strategies. We have expertise in assisting clients with purchasing or transfer of business properties into their SMSF, borrowing to acquire assets within super, super splitting on separation, implementing pension strategies and superannuation estate planning.
Estate Planning
We work with our clients and their legal advisers to assist in ensuring their assets are passed to their intended beneficiaries, whether family or charitable, in the most tax efficient and protected manner possible. Estate planning is a complex area which, in most instances, has a broader focus than simply preparing a will. We have experience in assisting with the implementation of complex estate plans involving considerations such as disabled beneficiaries, asset preservation concerns, complex entity structures and charitable objectives.
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Case Study
Residential property development undertaken in Self-Managed Superannuation Fund resulting in tax savings of up to $230,000.
A client intended to undertake a small-scale residential property development to build and sell four townhouses at an expected net profit of $500,000. We were able to assist in structuring the development to be undertaken in the client’s Self-Managed Superannuation Fund, resulting in tax savings of up to $230,000 when compared with undertaking the development personally.
Our client ran a successful construction company for many years and, as he neared retirement, decided to undertake a small residential property development which expected to generate a net profit of $500,000 on sale of the completed townhouses. He also had an existing Self-Managed Superannuation Fund which was invested across a number of typical asset classes such as cash, equities and property.
We were asked to advise on whether it would be possible, or advisable, to undertake the development within the SMSF.
Although it is unusual for an SMSF to undertake a development project, after a thorough and careful review of the relevant legislation, case law and ATO published guidance, and discussions with the fund’s auditor, we were able to advise on a suitable structure which allowed the SMSF to undertake the development.
As SMSFs are concessionally taxed, there are a very tight restrictions imposed on certain activities, particularly dealings with related parties. While not specifically prohibited, undertaking a property development within an SMSF requires careful consideration of a wide range of rules and restrictions, particular drafting of the construction services contract, and required that the development be undertaken, and materials acquired by the SMSF, in a particular manner.
The expected tax payable on sale of the townhouses was further reduced by the client having commenced a pension within the SMSF, thereby allowing access to the superannuation income tax pension income concession.
By availing themselves of the low-tax superannuation environment, tax payable on profits from the development will be minimal, assisting our client to reach their retirement goals sooner.