More and more Australians are realising the benefits of utilising their own superannuation to invest in real estate here and overseas and in particular in the U.S. property market, where many tax advantages can be achieved.
Income Taxation
Net income on US property investment purchased through you SMSF are taxed at 15%, compared to 30% for companies or for individuals up to 46.5%.
Capital Gains Taxation
Any US property held for more than 12 months will be subject to a capital gains tax of 10% instead of the 30% for companies or individuals.
Depending on your situation, other rates may apply.
Tax Offset – Foreign Tax Credit
If there is any tax payable by the SMSF, on either a capital gain, or net income, it will be offset against income tax payable in Australia, by the SMSF, by foreign tax credits for the taxes paid in the United States.
It is not recommend that a SMSF invests directly in US property as an asset protection strategy point of view. In case of litigation arising from the US property, the assets of the SMSF would be exposed. In this regard, it is recommended to invest through a special purpose vehicle such as a Australian Pty Ltd company as trustee for a Unit Trust, or in some cases a US incorporated Limited Liability Company (LLC). The Self Managed Super Annuation Fund will then own all the units in the Unit Trust or all the shares in the LLC.
For more information, feel free to contact us using the contact form.
