Learn the benefits of self-managed super funds to small businesses in Australia and how Xero accounting software makes these transactions easier.
With self-managed super funds in Australia allow citizens to reap the benefits of their hard work in their earlier years in life. These super funds are your long-term savings, which will enable you to have income even after retirement.
As a business owner, it is your responsibility to ensure that your business provides superannuation contributions that follow the ATO’s rules on filing and contributions. With Xero accounting software, you can easily keep track not only of your business’s cash flow, but also of the super contributions that you make for each of your team members and yourself
The ATO now requires all small business owners to coordinate with them regarding the super contributions using approved accounting software. The have set up SuperStream to be able to administer this process.The government has seen to it that all transactions are done electronically to avoid the risk of losing documents and miscommunication. You can be sure that with the use of, say, Xero accounting software, you will have no difficulty staying compliant with the government and the ATO.
This very easy process of filing super contributions is just one of the reasons why small businesses nowadays have less trouble with the ATO.
Asides from receiving contributions, superannuation funds, specifically Self-Managed Superannuation Funds can work for small business, here are the top 6 benefits of SMSF for SMEs:
Increase your Super Balance
You can ultimately increase your super balance by holding a business property under your SMSF. Make sure, however, that this arrangement is that of an arm’s length lease. The SMSF allows your small business to boost its super fund balance above the limits and become tax-free come retirement period.
Transfer property to SMSF
Owning an existing commercial property means that you can possibly transfer the said property to your SMSF. This transfer is potentially means little to no stamp duty.
Little to no capital gains tax
When your property is sold, you are required to pay little to no capital gains tax through superannuation.
Flexible non-concessional contribution transformations
The SMSF allows you to lend money to your superannuation fund. The debt that comes out of this can then be transformed into your non-concessional contributions provided that the debt is officially forgiven. However, note that this is only allowed if your business does not exceed the SMSF contribution limits.
Super fund lending
Super fund lending has no limits under the SMSF. What is important to remember, though, is that the loan always has to be at arm’s length and must remain on a commercial basis. It is highly advisable to seek assistance from your accountant, when going about super fund lending.
SMSF - The gift that keeps on giving
Selling your business can also be beneficial for business owners like yourself. You are allowed to keep the building where you business does transactions and continue to use it as an income stream.
There is truly more to the SMSF than staying in compliant with what the ATO wants and needs from small business owners. Speak to your financial advisers today and find out what else the SMSF can do to add value to your business. It also pays to set up Xero accounting software now and reap the benefits of cloud accounting.
To learn more about the wonders of SMSF, you can download our free eBook, “The Only Self-Managed Superannuation Funds Handbook You’ll Ever Need”. You can also speak with our team of professionals to find out how the SMSF can transform your business for the better. Get in touch with us now!