Insane amount of money baby boomer has in his self-managed superannuation fund - and how he did it

Daily Mail​

3 days ago

A software billionaire has a breathtaking $1.7billion in his superannuation fund - and he's set to be one of those hit hardest by Labor's new super tax.
Charles Gibbon, 76, a director of software developer WiseTech, could be as one of Australia's most enthusiastic investors in self-managed super.
His family's Fabemu No. 2 self-managed super fund has 15,594,630 shares in WiseTech - but will be thumped by Labor's new tax if it becomes law on July 1.
If his stock rises 10 per cent during the next financial year, taking its price to $119.65, the value of the super fund would increase from $1.696billion to $1.866billion.
Labor plan to bring in a new 15 per cent tax on unrealised gains - based on purely notional profits, not real ones - in super accounts with balances above $3million
That $169.67million increase in value in Mr Gibbon's super fund would land him a tax bill of $25.4million just on those notional profits...without him selling a single share.
The reclusive entrepreneur, originally from New Zealand 's South Island, has been a WiseTech board member since 2006.
He made his eye-watering $2billion fortune as an early investor in WiseTech, founded in 1994.
During the early days of the internet, the company started writing code for the freight industry. It is now the 21st biggest firm on the Australian Securities Exchange and a world leader in supply chain software.
Mr Gibbon was instrumental in the success of the $36billion firm and stood by embattled WiseTech founder Richard White when others directors quit in February, following a string of revelations and allegations about White's lovelife.
He splits his time between Sydney's eastern suburbs, where he lives in a Woollahra mansion with his wife Claire, and the NSW South Coast, where he has a six-hectare weekender at Bellawongarah, near Berry, and beachfront land at Gerringong.
He grew up in Invercargill before studying a Bachelor of Science majoring in pure maths at the University of Otago and becoming a London-based stock analyst.
Despite his wealth, he shuns the spotlight and rarely makes an appearance on Australia's glamorous social circuit for the well-heeled wealthy.
Mr Gibbon joined The Australian Financial Review's elite billionaire Rich List in 2022 after his company's share price surged from $11.80 in March 2020 to $55.95.
As of Thursday, WiseTech's share price had climbed to $108.77 - almost doubling in just three years despite some hiccups earlier this year during boardroom turmoil.
The share price has catapaulted his super fund portfolio through the billion-dollar mark - and left him in the crosshairs for Labor's new super tax, which is aimed at the super rich.
But experts warn the tax could have unintended consequences and punish budding start up companies before they have a chance to flourish like WiseTech did.
Tax planning accountant Ben Johnston, a director of Johnston Advisory, predicts that tech start-ups would be worse off if the the new law comes into force on July 1.
Wealthy self-managed super funds may be forced to sell-off assets to avoid paying the new tax on the notional unrealised gains, hampering the growth of young firms
'They rely on those big backers to have their investment in there to see them through the start-up phase,' he told Daily Mail Australia.
'If they start cashing out of them in response, to free up liquidity within their SMSF, that will potentially be an issue for start-ups.'
Tax office data showed that of the start-ups with more than $50million in assets, 23.2 per cent invested in listed shares on the Australian Securities Exchange while 7.5 per cent had investments in unlisted entities, which can include start-ups that aren't on the share market.
Australia was home to 616,941 self-managed super funds at the end of June last year.
They had 1.142million members with multiple people allowed to be members.
The Greens want the threshold reduced to $2million but indexed for inflation.
Labor is proposing a $3million threshold that isn't indexed for inflation.
Overall earning taxes would double to 30 per cent above this threshold, which includes the new 15 per cent tax on unrealised gains, based on the change in a total superannuation balance.
The total headline tax take includes a 15 per cent tax on earnings over a financial year, including income from a self-managed super fund investment like a house that is being rented out, proceeds from an asset sale or appreciation in the value of an asset.
Earnings would only be taxed at the accumulation but not the retirement phase of super when someone can access their superannuation at 60.
The re-elected federal government now only needs the Greens to get its legislation through the Senate.
But until that occurred, Mr Johnston said it was hard to give advice to clients about whether they had to sell high-performing assets to avoid Labor's proposed new tax.
'I'm just telling them to review their liquidity first and foremost because a lot of it's crystal ball,' he said.
'The problem with this too is the uncertainty - it's hard to truly respond to it because the taxes on the unrealised gain.
'If you're going to take really fundamental action around it, not knowing on what gain you may make; again you're assuming you are going to make a gain in the first place.
'To then go and sell property or shares in potentially profitable companies just for the sake of a potential tax problem down the track, it's also a big call and not necessarily the right one.'
The problem would be more pronounced in self-managed super funds that have a higher concentration of assets like farms that were lucrative but harder to sell to have cash to pay a tax bill.
'If you've got a self-managed super fund with $10million in say real estate or in rural property or land or whatever, and you've got very limited cash reserves, you've got a real problem then,' Mr Johnston said.
After new senators take their seats in July, Labor could pass the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill in 2023 after that date, with support from 11 Greens senators, and backdate it to July 1.
Labor would no longer need the support of moderate, left-leaning crossbenchers like Jacqui Lambie or David Pocock, who have expressed concerns about taxing unrealised gains.
Fabemu sold 1.5million shares for $200million in early December.