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SMSFundamentals: An Alternative For The Capped-Out

SMSFundamentals | Dec 15 2016

SMSFundamentals is an ongoing feature series dedicated to providing SMSF trustees with valuable news, investment ideas and services, in line with SMSF requirements and obligations.

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By Richard Atkinson, Head of IFA and Product Relationships, Austock Life

Capped-out super accumulators look for alternatives now Senate passes superannuation reforms.
Can Imputation Bonds help fill the gap?

The superannuation reforms have now passed the Senate and will be in place from July 2017.

Post July 2017 high income/high net worth clients and indeed some before then who have already triggered their bring forward contributions, will look for alternative, tax efficient and flexible structures to invest in. 

Like superannuation, Imputation Bonds are a tax-paid investment structure.  Unlike superannuation, funds within an Imputation Bond are totally accessible at any time, the bond itself can be transferred to another owner without tax and mimic, though improve upon, many features of superannuation.

Imputation Bonds provide flexibility, liquidity and are also the next best tax structure after superannuation for higher net worth clients. 

Key Imputation Bond benefits and features include:

  • Market-leading investment menu  covering all investment sectors, including; Australian equities, international equities and fixed interest fund managers, plus infrastructure, property, index funds, cash and Term Deposit funds available.
  • Annuity-like withdrawal streams
  • Effective tax rates average between 21 -30% on earnings
  • Full 30% tax offset on withdrawals under 10 years
  • No Tax File Number requirements 
  • No tax reporting (unless withdrawal made in first 10 years)
  • Nil tax on withdrawals post 10 years
  • Tax effective and certain  estate planning – Bond nominations bypass the estate and probate
  • Legislatively stable when compared to superannuation.

Richard Atkinson,
Head of IFA and Product Relationships
Austock Life

Distributed by Chris Hocking Strategies

About Austock Life

Austock Life is a leading and specialist issuer of insurance bonds investments. Its flagship Imputation Bond (including ChildBuilder) offers a master fund-like menu of over 33 Investment Options constructed under an insurance bond “tax-paid” and “tax-free” distributing structure.

Austock Life is an APRA supervised life insurance company established in December 2002. 

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