Question about drawing from superannuation and putting it back

Discussion in 'Legal Issues' started by wylie, 25th Sep, 2021.

Join Australia's most dynamic and respected property investment community
Tags:
  1. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    14,020
    Location:
    Brisbane
    I know very little about super so hopefully this is not a really dumb question.

    Hubby and I each have a super account.

    If we draw say $100k out of one of our superannuation accounts to lend to a family member short term, I believe we could sell an IP and deposit $300k into each account, but that would mean no more deposits for three years.

    If that is the case, could we deposit more cash after three years?

    If we sold two houses in two tax years, and couldn’t add more to our super, could we open a SMSF and have that separate to our industry super funds?

    If so, could we sell an IP, open a SMSF to buy a house and the rent from that house would come to us rent free?

    Or do I have it all wrong?
     
    wylie, 25th Sep, 2021
    #1
  2. qak

    qak Well-Known Member

    Joined:
    1st Jun, 2017
    Posts:
    1,678
    Location:
    Sydney
    You need to provide more information on your age and how much you have in super - I probably wouldn't put that out in public.

    Aside from your age/s you need to consider non-concessional contributions caps (limits what can be put into super) in conjunction with your total super balance.

    Their are restrictions on when you can withdraw from super - look up conditions of release.
     
    qak, 25th Sep, 2021
    #2
    wylie likes this.
  3. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    14,020
    Location:
    Brisbane
    Thanks @qak .

    We are over 60 and retired. We used most of our super to finish our DA project. We paid no tax as we drew it out.

    We are considering selling one or two IPs, lessen the holding costs, not hold everything in property, and put some back into super.

    We will be paying for proper financial advice, but I've been asked today if we could cover an auction deposit before we get a chance to get a definite answer, so thought it might be a quick, easy answer.

    I am comfortable knowing I can withdraw but I am unsure of the rules about putting it back in. I doubt it will happen tomorrow anyway. But you never know...
     
    Last edited: 25th Sep, 2021
    wylie, 25th Sep, 2021
    #3
  4. qak

    qak Well-Known Member

    Joined:
    1st Jun, 2017
    Posts:
    1,678
    Location:
    Sydney
    qak, 25th Sep, 2021
    #4
    wylie likes this.
  5. Propin

    Propin Well-Known Member

    Joined:
    7th Mar, 2016
    Posts:
    3,679
    Location:
    Perth
    Was the property ever your principal place of residence?
     
    Propin, 25th Sep, 2021
    #5
  6. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,255
    Location:
    Sydney or NSW or Australia
    You have to go back to work :eek: & meet the work test (40 hrs in a month), open a new accumulation fund & contribute whatever is permitted (if you're able to/subject to age, caps & current balance limits etc).
     
    Scott No Mates, 25th Sep, 2021
    #6
  7. jaydee

    jaydee Well-Known Member

    Joined:
    25th Mar, 2016
    Posts:
    921
    Location:
    Perth
    As you are over preservation age you can withdraw whatever you like. However, you will be limited to depositing $110,000 each year as non-concessional (ie. using aftertax money) plus $27,500 pa as concessional contribution. Similarly, you can use the bring forward rule to contribute $330,000 as a non-concessional.

    This is each.

    Do your own checks , but I'm reasonably confident of the above.
     
    jaydee, 25th Sep, 2021
    #7
    wylie likes this.
  8. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    14,020
    Location:
    Brisbane
    Thanks everyone.

    I've heard now the deposit can be covered by the in-laws without touching their super. So the urgency is gone.

    I just needed to get some clarity before saying "go ahead and bid". All sorted now.
     
    wylie, 25th Sep, 2021
    #8
    Marg4000, Scott No Mates and qak like this.
  9. Never giveup

    Never giveup Well-Known Member

    Joined:
    13th Oct, 2018
    Posts:
    1,571
    Location:
    Sydney
    @jaydee , currently doing bit of leg work for SMSF and wanted to confirm about bring forward rule

    We are going to set up SMSF to buy an IP after rolling over our existibg super $$$ from industry super and we are also selling one IP and will be contributing approx 300k does that mean the $100K extra will be considered bring forward for one of us e.g. my wife that means next FY year my wife can't contribute non concessional?

    Edit- there be no loan on smsf prop
     
    Never giveup, 26th Sep, 2021
    #9
  10. jaydee

    jaydee Well-Known Member

    Joined:
    25th Mar, 2016
    Posts:
    921
    Location:
    Perth
    sorry @Never giveup , I can't advise on your situation as I don't have the qualification nor knowledge of your situation.

    My comments to @wylie were my opinion only (based on my own personal experience).
     
    jaydee, 26th Sep, 2021
    #10
  11. Never giveup

    Never giveup Well-Known Member

    Joined:
    13th Oct, 2018
    Posts:
    1,571
    Location:
    Sydney
    No problem @jaydee , thanks
     
    Never giveup, 27th Sep, 2021
    #11