Self-managed Super Funds can save our Medicos

Strict ethical requirements restrict doctors and health professionals utilising discretionary trusts, but they still have options for improving their overall financial health.


With a couple of major hospitals in TWT territory, doctors and medical professionals are in ample supply.

And they pay a lot in tax, perhaps too much. Tax legislation restricts their use of discretionary trusts and similar entities, so they generally cop it sweet.

But there’s still stuff they can do and iChoice has been able to help many doctors and medical professionals because we love helping those who spend their lives helping others.

Because they understand and respect the specialist framework in their own profession, they are particularly receptive to specialist financial advice.

Dr Craig and Mrs Diane (not their real names) have just left my office very happy indeed.
They have a commercial loan of $1.4m owing on their surgery that receives rent of $180K per annum from their business.

We just signed docs to refinance this loan, using their owner-occupied property as collateral, so they can get a variable rate of 3.59% (with a 2.18% lifetime discount). This will immediately save them more than $18,000 a year in interest.

And my accountant is calling them later today to discuss setting up a SMSF to acquire this surgery. Even though it’s worth $3m, the stamp duty to switch it across is only $500 because it’s currently held in their personal names and is NSW business real property.

Rather than paying 45% tax on the rent, the 15% tax rate inside Super will save them $54,000 every year.

So when they hang their boots up, their SMSF tax rate will be reduced to 0%, saving them $81,000 each year.

Our iChoice premises was bought through an SMSF last year. Since I’m 48, by the time I’m 63, I’ll have be able to draw a pension of $90,000 (based on today’s dollars). So this measure certainly ticks the ‘asset protection’ box.

It’s the different tax treatment that makes going down this path so financially advantageous. If it wasn’t so absolutely legal and acceptable, you’d call it a scam.

Knowing the whole picture makes a huge difference to what tweaks I can recommend to put you in a better financial position, so give me a buzz if you’d like some guidance or to run anything past me on 0400 900 300 – there’’s no charge.

Something (off-topic) I need to get off my chest: The words “to be honest” before a statement is something I’ve encountered a lot lately – it gives the impression they pick and choose when they’re going to be honest!
If you feel yourself about to say it, do yourself a favour and change it to “to be frank”. That is, unless your name is Frank – that might get weird.

I’m really enjoying meeting so many TWT readers and would like to thank those who’ve allowed me to help them save some money on their loans, for their trust and support.