Super place to protect your assets

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If you’re a small business owner, you probably think of your business as your retirement nest egg. You invest your time, energy and money to build it up and maximise its value for when you retire.

It makes sense to invest in what you know but the changes to superannuation will make it more attractive to invest and protect your assets.

The Simpler Superannuation laws have levelled the playing field between employers, employees and self-employed people. From 1 July 2007 the new rules will allow the self employed to

Claim 100% of superannuation contributions as a tax deduction.
Qualify for the Government’s co-contribution.
Receive a higher level of tax-free super if they leave work because they are disabled.

Small business owners who sell their businesses can make higher contributions to superannuation than employees or larger businesses.

Another attraction of superannuation is that it is protected from the claims of creditors if your business falls on hard times. Currently you can have super up to $1,356,291 that will be protected if you are bankrupt or enter into a scheme of arrangement. From 1 July 2007 there will be no limit – whatever is in super will be protected.

This change will complement recent enhancements made to the Bankruptcy Act 1966. The new legislation enables the courts to examine superannuation contributions made after 28 July 2006 to see if they were made with the intent of defeating creditors.

The courts will look at the pattern of contributions paid into super. If you have been putting $1,000 a month into super for the last five years it will be protected. If you suddenly start making one-off contributions or paying larger amounts into super, the courts may be able to recover them to pay your debts.

The Simpler Super legislation seeks to encourage all Australians to invest regularly over their working life. For business people who may be vulnerable to being sued or who operate in volatile industries, protecting your assets in superannuation is a powerful reason to make regular contributions.

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Please contact our nearest office if you would like more information on this topic.

Bentleys Chartered Accountants and Business Advisors has offices in:

Australian capital cities Sydney, Melbourne, Brisbane, Adelaide, Perth, Canberra

Regional and suburban Dubbo, Gosford, Ipswich, Maroochydore, Newcastle, Tamworth

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