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Q: Hi all, if a shareholder of an unlisted public company is wanting to sell their shares what information is the company obliged to provide in relation to the financials and performance of the business to allow the shareholder a reasonable chance of selling their shares?
A: Good comments above.
Unlisted pub companies are required to publish their audited financial reports annually and these must be lodged with ASIC and are therefore available to the general public via the ASIC company search function for a fee.
The other things to consider, ASIC will also show the company’s registered auditor details so you could approach that way; further it will hold the companies constitution which will operate in consultation with any shareholders agreement. These two documents will detail what rights the company has granted over base statutory to shareholders for access to accounts, management etc. They will also detail the share sale process ie is there pre-emption processes in place which require shares to be offered to existing shareholders before going wider to general public.
Hope this is of some help Paul.
I’ve have quite a bit of experience in this particular area if you have something very specific you want to run past.
video
How to reduce superannuation fees - Squirrel Super
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Q: Can anyone tell me what the current average loan duration for a principal and interest (owner occupied) loan is in Australia?
A: Hi Adam,
From a non-bank perspective it is just over 3 years or 3.3 years to be precise.
This is the length of time the loan sits with a lender before it is refinanced either by same lender or into another lender.
Not sure about Main Street banks but hope this assists with non-banks who fund their loan books via RMBS.
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Q: USD interest
I have > $250k sitting in a zero interest acct in the US. I am awaiting a drop in the Aud before bringing home.
I think the US share market is at a high and so do not think Shares or ETF's will preserve the capital. I dont think I can have a USD interest bearing account as a foreigner.
Any thought on where I could park this money?
A: Hi Mike,
May sound a little strange, however Squirrel has had this issue with funds from our international subsidiaries. We use Bank of China (see you're in NSW, they are at Wynyard).
They have a range of accounts and TDs with no acc keeping fees for USD that pay a pittance ie 0.21% and they like to bargain on the rate so you might be able to get it up a little.
We use NAB and Macquarie for our core banking but for international currencies bank of china are absolutely fantastic (in person - terrible over phone)
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Q: Hi, my Dad wants me to be a trustee and beneficiary for a property he wants to buy in Tasmania and live in it. I get no benefit from the transaction. No rental income...nothing. What am I obligated to do if I do go ahead with this? I would have to declare this on my tax but if I'm not receiving rental income, what's the benefit? What am I also liable for if anything goes wrong? Thanks
A: I agree completely with Patrick. From an Accounting / Tax perspective more information is needed to correctly advise, ie type of trust, your income sources, are you sole beneficiary, does the trust own the entire property or does it hold units in it.
Best advice is to seek out an experienced Accountant close to you who can assist. Also someone ideally experienced with trusts in TAS as often land tax rates are higher on properties held in trust vs owner occupier
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Q: How much should I pay for a 3 x 2bdrm block of Torrens title units that are currently uninhabitable and require a 6wk cosmetic renovation ($100k) for a combined income of $900/wk post Reno?
A: Hi Bel,
I'm not a property expert, but if you intended to get a gross rental return of 3-4% then at $900pw the pricing is between $1.1 and $1.4m for purchase. Though there are lots of other considerations.
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Q: Putting money into super.
I don't have any superannuation and am 60 years old with no income or Centrelink payments. I have been given $100,000 and am wondering should I set up a SMSF and put this into it or should I put it into a managed super fund.
How much can I put in prior to June 30th? What are the implications of putting the $100,000 into a fund?
A: Hi Helen,
I agree with James. SMSF does provide lots of flexibility, though from quick thinking about your situation I'd bet a retail / industry super fund is the way to go for you.
I am curious why you wouldn't be receiving any sort of assistance from Centrelink - is it the $100,000 that's the issue, though typically the asset limit for Newstart is $250K for homeowners and $450K for renters (singles).
One thing I'd ask you to look into very carefully is the cost of the financial advice you receive. With the greatest of respect, $100K in super is a very modest amount to last you a lifetime so try to find a completely independent financial adviser and then for advice when you need it and not an annual % of your balance. Then shop around for a super fund - some have very, very low fees.
Damien
Squirrel
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Q: I am 60, will retire at 67 and get the single age pension. I rent from the department of housing and pay 20% of my income in rent. What should I do with my $90,000 super that dose not earn 'income' and increase the rent?
Amanda
A: Hi Amanda,
A little confused by your question - sorry.
As it stands gather you are employed for the next 7 years as such your super is not deemed for the purpose of Centrelink calculations.
Once you retire it will be - by deemed I mean that Centrelink will apply a percentage to the balance that is recognised as income - say 4% or in your case $3,600.00 per year.
While it Le a while away, once you retire you should investigate setting up an Allocated Pension. Currently there are benefits of these structures for Centrelink calculations - though it will be important to seek professional advice closer to your retirement to see if legislation still supports this.
Hope this answers your question, let me know if you need some more clarification.
Regards,
Damien Linn
CEO - Squirrel
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Q: I have a healthy steady income (self employed) but I have huge credit card debt which I can barely keep up with. Because of this I can't afford to contribute to my super. My payments are only the minimum so it's not going down. I don't have any assets I can sell. I rent. I have plenty of super, I could pay it off and still leave plenty. I'm 35. Is there anyway I can access my super? From what I've researched I need to be out of work and on Centrelink for a certain amount of time.
A: Hey Michelle,
Firstly nice to hear from someone down in my home town - love getting back to Adelaide.
Sadly it's next to impossible to get funds from super pre-retirement. Typically you need to be on deaths door to arrange release for medical purposes or sitting on the dole for half a year and need funds to cover mortgage.
I really feel for you. When I started Squirrel years back I'm sure like you, you throw everything you have into your business and when you look for a little help to get through some lean times it gets bloody frustrating that if you were sitting on the dole there would be lots of help but nothing if you're trying to create employment.
I'm not a finance expert but maybe you could investigate the hardship provisions under the responsible lending act. Most banks will have a department for this which might result in your interest payments and accruals being frozen for say 3 months - that could help you to focus on paying down the credit card balance so when interest comes back it's more manageable ?
Hopefully there is a finance guru who can assist.
Wishing you every success,
Damien Linn
CEO Squirrel
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Q: I am 64, not working & receiving an allocated pension from my Super Fund.
My wife is 60, working part time ($13000 annually) & contributing to her Super Fund.
If my wife ceases work by the time I reach Aged pension age & also ceases contributions to her Super, will her fund still be considered to be in Accumulation phase & thus not be included in my Income/Assets for purposes of my Aged Pension application?
Thank You.
Kevin
A: Hi Kevin,
Best answer is to suggest you seek professional personal financial advice - either from an independent financial adviser or even contacting the free financial consultant service provided by Centrelink.
You're question in totality really requires a full assessment of both your situations.
In a very general sense and taking no other information into consideration, you wife's if under 65 can keep her super account in accumulation. From ages 65-74 a work test applies to maintain this status.
Again, this is best approached by a quality adviser in receipt of all information
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Q: hello i am inquiring about a friends issue
he has recently lost his father and we are unable to find any super paper work
i was wondering if there was a way to track it down like the lost super you can
if so where would be the best way to start this process ?
A: Hi Jon,
A little bit of a strange approach and to be honest conflicted slightly recommending this to you - though it is by far the simplest way for you to get a full picture of your friends situation.
I'd suggest you friend goes to the ATOs super seeker/MyGov portal as though they are their father. Punch in member's TFN and other personal details then the system will report all live and lost super accounts (excl SMSF).
It would be prudent to review and insurance cover within each fund to see if there are benefits. Once you have visibility over the funds they can be distributed to the estate or the nominated beneficiaries.
I wish there was a simpler way, but there is likely to be quite a lot of paperwork and calling to the super providers.
Wishing you and your friend all the best at a difficult time,
Damien Linn
CEO - Squirrel
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Q: I'm 54 and am only able to find contractual work.
I have $250,000 in my Superannuation.
As I don't own a home and can't seem to get full time employment. What's the best option for my super?
A: Hi Trevor,
A few options - hopefully you'll fit into one.
If you were born in the 1963 Financial Year the earliest date you can withdraw your preserved super is age 58 and then you'll need to check the rules at the time to see what if any part can be taken tax free (currently it's the first $200K - though there are tricks to better this).
An easy option if you're lucky And were a member of a super fund before 1999, then you may have some unpreserved benefits. Unpreserved benefits are officially known as ‘restricted non-preserved benefits’ (certain type of super benefits that you access when terminate employment) and ‘unrestricted non-preserved benefits’ (can be accessed at any time). If you fall into this category or don't know my best advice is to give your superfund a call and ask if you have any unrestricted / non preserved benefits and what fees / costs may apply to taking some of these funds out to fund you through to age 58.
Lastly there is a way to gain access to $10K for compassionate grounds though you would need to be in dire financial stress - again your fund will be able to advise their criteria for compassionate access. And believe it or not, out of the $10K the govt will take tax.
Hope this helps to explain a couple of options
Damien Linn
CEO - Squirrel
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Q: Looking for advice around the best potential structure for a company so that its assets are protected. Some accountants have suggested:
1. Setting up a private company and allocating its shares to a discretionary trust
2. Setting up a private company and allocating its shares to a discretionary trust where the trustee is a private company
3. Setting up a private company and allocating its shares to a discretionary trust where the trustee is another discretionary trust
Which do you recommend?
A: I agree with both Adam and David - option 2 plus plus. Important to have the right structure for income, tax and protection.
Insurance is a key consideration as is the importance of the correct operating controls / delegations.
In my opinion build for growth thus structure to give you the most flexibility around profit streaming and tax benefits but cover the backside at the same time.
Mireille Salloum
7 years ago
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Q: I have a rental property. The tenant has passed away. My real estate took it upon themselves to clear out the rubbish the tenant had left and cleaning the back yard without my knowledge. After 8 weeks I find out I owe tradies $2300. Why was I not shown or told of the mess by the AGENT and allowed to inspect for myself? Are the Agents trying to hide something. What are my rights as a landlord?
A: Hey Suzanne, likewise I'm not a real estate property expert though I've had a similar experience to you. Maybe have a look at your landlords insurance policy - there is a good chance it will cover these costs (mine did).
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Q: Hi, I’d like to ask the industry experts on simplyaskit about their opinion on the discussion about first home buyers being able to tap into their superannuation as a means to come up with the deposit to buy their first home. Is it a good idea and should there be any conditions or restrictions to accessing their super?
A: Hey Sophie,
Have to say in all my years hosting money programs on radio 2UE and 2GB this question came up without fail every single month. I typically have a different view to many in the superannuation space.
First let me say that super is precious and the fact it can't be touched until retirement and thus it's left to compound (Einstein's eights wonder of the world) is a real feature of the AU retirement system. It's an amazing way for every day Aussies to have financial security in their later years.
That being said, the security that comes from having your own home and a roof you own over your head also gives people massive comfort.
So all that being said, I think with careful management allowing people to access some of their super to buy their FIRST home would benefit the wider population, with come key features:
1 - this withdrawal is offered once and once only
2 - the home loan should have a maximum LVR of say 80% - to provide some extra protection and make it easier to afford and thus reducing the risk of loan default
3 - Loan should be a Principal and Interest loan ie no interest only
4- there should be a cap on the value of the home indexed to the state it's purchased in
The difficulty for people to get into the property market is more a macro issue. If you assume property doubles every 15-20 years that's an increase of say 6.6% every year - don't know how many employers give their staff that or more as a pay rise every year so as a result for many the dream of home ownership slips further and further away every year. Maybe a one off helping hand from super can help correct the imbalance. It just has to be done very, very carefully.
Look forward to seeing others view points.
Damien Linn
Squirrel
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Q: Our business has 3 partners and after 2 years together we have started discussing how we can protect the business and our families. What type of insurance should we be looking at?
A: Hi Chris, it's worthwhile getting very good advice from a professional insurance specialist.
In my business we lost a key person very early on as a result of a sudden death and didn't have this piece solved. We had conflicting advice on whether the corporate PI / Mgt Liability policies may have provided some assistance.
When we went through the process of talking with specialists we found the advice varied substantially - from our experience you're best to find an insurance specialist, a legal specialist who understands estate planning etc and an Accountant you trust. As all three play a critical and interdependent role in designing the right protection for both your business and each partner personally.
Personally - we interviewed a number of these parties and selected an insurance specialist who charged us by the hour vs being paid a commission. For us it was critical to have unbiased advice vs advice paid for by a particular insurance company via commission.
Anyway that's our story - hope it helps.
Damien
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Q: Can I use my SMSF to invest funds into my own business?
A: Hey Megan,
Great responses above. A couple of points to clarify:
1. Albert is correct, you could purchase business premises and rent these back to your company
2. If it's capital into the actual business - there are a number of matters to consider:
(a) In-house asset rule is limited as Albert mentions to 5% - it's important to think about how your business is valued - if for instance your accountants re value your business each year it could exceed the 5% (ie start with a value of $1m and invest $50K, then business value increases to $2m, you're immediately double the 5% max);
(b) secondly for in-house asset test we typically use the ASIC/ATO definition of a widely held company, being one with more than 50 members.
Essentially the reason for the restriction on investing in your own business or for that matter operating any business from a SMSF is to keep out tax dollars flowing through to the folk in Canberra. Given a SMSF is taxed at 15% on earnings, the Treasurer would loose the other 15% they charge to bring company tax up to 30%.
Hope the above helps clarify.
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Q: What are your thoughts on purchasing a residential property within my SMSF and why would this be more beneficial than investing in Managed Funds/Equities?
A: Hey Pete,
In my experience the core reason I like property in super over bonds/equities/managed funds etc is not what most would think.
Property is a lumpy asset, and while it does actually change in value frequently - think of an auction price achieved when you're out rain pooring down like cats and dogs vs a sunny day with everything working to your advantage. My reason is property typically gets held long term which provides Ling term wealth growth that doesn't come with buy-sell costs and the risks of punting the wrong stock.
There is also the benefit of leverage. If you had say $100K in super invested in shares / mgt fund and made say 8% annual return that's good. If you used the same $100K to buy a place worth $300K with a mortgage you have $300K working for your retirement - ie rental income based on a $300K asset and capital growth again based on the same. So 8% mgt fund might get you $8K return. If property doubles every 20 years (5% per year) that's an annual return of say $15k.
Ultimately it's a personal decision and. I particular strategy is brilliant or terrible. If you're the type of guy that like to buy and hold maybe property is the go - if you like a punt then maybe playing with the market is the go. Alternatively maybe you hedge you're bets and put some funds into a property and have say 10-20% you can play with on the stock market.
Hope this helps,
Damien @ Squirrel Super
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Q: Have you used a buyer's agent or buyer's advocate to purchase a home? What has the experience been like? Do they offer good value for money?
A: Hey Larry,
I've used one personally a number of times. Interviewing and finding the right one that works with you and your style in my experience is critical.
NB - I've only used one for investment properties never for my personal home.
In my experience the outcome was worth every single cent I invested in paying a professional.
Damien
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Q: I have a desire to pool my wife's superannuation with mine and invest in a property. I understand that I must move into the SMSF to do this but what are the practical steps associated with the plan?
A: Hi Jimmy,
Looks as though you'll have quite a bit of material to consider. Great to see a number of experts providing you with some advice. Typically this process can be quite complicated and access to lending has become more complicated in recent months / years. Though there is some good news.
Squirrel is a SMSF specialist operating a digital business - via our system you can establish the complete structure - establishing the SMSF including the additional structures like property holding trusts to facilitate borrowing to purchase a property online within about 5 - 10 minutes (depending on how quick you type), then you are free to work with any lender you like to arrange the borrowing. Ronald is correct in that Lenders have started to reduce their appetite for SMSF.
Squirrel is however a major lender in it's own right and we lend around $400m per year to SMSFs to fund property purchases. Like all our divisions the SMSF lending business doesn't pay or receive any commissions and therefore our loan product isn't available via brokers / advisers - in other words it is exclusively available to our SMSF clients.
I've just put some data into one of lending our tools, which calculates what and where you could buy based on your super balance and income (to qualify your minimum employer super contributions)with the following results:
If you have a combined super balance (between you and your wife) of say $120K and a combined household income of $120,000 per annum. The outputs look like this:
The Max you could borrow (if Squirrel was the lender) is: $305K - meaning the purchase price would be 382K (this factors in paying around $13K in purchase costs like stamp duty and keeping 10% in cash in the SMSF for safety sake.
You then look at what type and location of property you can buy. Our system using the above highlights the following areas in NSW that pass actual and stressed (always good to factor in rates increasing) serviceability on the loan payments (using your super contributions and the rent to pay the loan). Some places to look:
Unit: South West Rocks: Med Sale Price $242K, Med Rent $420 p/w, Gross Rental Yield 9.02%, # of units for sale: 26
Unit: Sapphire Beach: Med Sale Price $237K, Med Rent $390 p/w, Gross Rental Yield 8.57%, # of units for sale: 8
House: East Kempsey: Med Sale Price $232.5K, Med Rent $340 p/w, Gross Rental Yield 7.60%, # of houses for sale: 9
House: Captains Flat: Med Sale Price $215K, Med Rent $300 p/w, Gross Rental Yield 7.26%, # of houses for sale: 12
Obviously these are regional locations and an increase in either SMSF balance or household income would open up metropolitan areas in NSW. Alternatively considering states like South Australian and Tasmania would open up metro areas using the $120K balance we started with.
I hope some of the above made sense and best of luck as you consider the pros and cons of controlling your own retirement via a SMSF.
Regards,
Damien Linn
Squirrel Super
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Q: I'm interested in setting up my own self-managed superfund - is there a minimum amount I need to have in super to make it viable. Also in speaking to my accountant they suggested it would cost around $3 - 5,000 to set one up, does that sound right?
A: Hi Adam,
Thanks for your question - and you are correct. Identical cost whether there are :
- 1 - 4 members;
- whether there is $100K or $10m
- whether you are invested entirely in cash, managed funds, direct shares, unlisted companies or have a number of investment properties.
Chris also raises a good point on fees. And this is typically a question that starts with your super balance and also the types of investments.
If you are investing exclusively in cash for example, usually an industry super fund is the way to go. If you are in a retail fund be very careful of the fees they charge. For example I just had a quick look at the amp.com.au website. Their Flexible Super product invested in the AMP Capital Stable investment bucket costs about $1,650 on a balance of $150K - AustralianSuper a major industry charges $618 for their Stable investment bucket and had better returns over the last 12 months (don't quote me just a very quick look).
SMSF makes more sense as your balances increases. Though, if we use the $150K example again and it's you and your wife for instance in the fund a SMSF can actually cost you less than an industry fund. In this example, Australian Super comes out at $1,396 for the two members; a SMSF the way we do it at Squirrel is $1,320.
Superannuation is such an important aspect of our financial lives. It's really important that you do your own research, google, ask questions on sites like this and take the time to understand the impact of fees.
There is a fantastic report produced by the Grattan Institute in 2014 - it showed that average fees in Australia's superannuation sector would take on average $250,000 of the retirement savings of an average 30 year old and usually the higher the fees the worst the investment returns (astonishing isn't it).
Here is a link for some bedtime reading.
https://grattan.edu.au/report/super-sting-how-to-stop-australians-paying-too-much-for-superannuation/
Cheers, Damien
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Q: I'm interested in setting up my own self-managed superfund - is there a minimum amount I need to have in super to make it viable. Also in speaking to my accountant they suggested it would cost around $3 - 5,000 to set one up, does that sound right?
A: Hi John,
At law there isn't a minimum imposed, though like all forms of superannuation the decision to move to SMSF must be on the basis that will grow your wealth.
Headline fees can very very different between Accountants and SMSF administrators. To make it easy for you here are a list of the typical statutory fees you will incur in the first year. When investigating different firms, it's important to understand which of these they include so you can compare apples with apples.
A SMSF is a legal structure operated by a Trust and that Trust is controlled by either an individual (ie yourself) Trustee or a Corporate Trustee (company of which you would be a Director). If you are considering a SMSF to purchase an investment property then it's a requirement of just about every lender that you have a Corporate Trustee.
Buying a property within SMSF - if you are considering this and will need to borrow some funds, then you will need another structure called a Bare Trust - this will also need another Corporate Trustee.
Therefore here is the laundry list of costs associated with the initial establishment of a SMSF; I have used the costs listed on cleardocs & ATO websites and based these costs on setting up a fund to purchase an investment property:
$744.00 - SMSF Trust Deed and Corporate Trustee company
$209 - $599.50 - Bare Trust / Borrowing pack
$650.50 - Company registration for Bare Trust Trustee including TFN registration
$518.00 - ATO supervisory levy (for newly established SMSF funds you pay the first two years $259 per year) in advance
$2,121.50 - $2,512.00 - TOTAL COST
Of course the provider does need to make some profit so your numbers do seem about right - though if these costs only include a very basic set up and you will be responsible for additional costs associated with setting up structures for borrowing and/or ATO levies $3 - $5K seem a little expensive.
Finally, as an example at Squirrel Super we charge a fixed fee of $2882.77 + GST which includes every aspect of establishing a SMSF, borrowing structures, ATO levies etc and the Squrirel team take care of all the other aspects of establishment including rolling over existing funds, establishing bank accounts, broking facilities etc. Squirrel's technology delivers these components online in just a few minutes so you don't need to be an expert and thus the reason we can do this for a good price.
The other component is the annual ongoing compliance costs - it's important to confirm with your provider than things like Audit costs (usually around $400), company returns ($46 for SMSF Trustee, $246 for Bare Trust Trustee), Tax Return, etc. As an example Squirrel will charge $1,320 per fund and incorporates every cost.
Managing you own super can make a really positive impact on your ultimate retirement balance - look out for fixed fees rather than percentage based. Hope the above helps you make a decision on whether managing your own super is a good idea.
Damien Linn
CEO - Squirrel
