Author: David Busoli

Financial Dependency or Empty Promise?

Children who are financially dependent on a deceased parent will pay no tax on receipt of the taxable component of the parent’s superannuation benefit. There is a view that otherwise independent children can qualify as financial dependents simply by being in receipt of regular payments from their parents and arranging suitably worded declarations This is simply not true....

Investment Strategy Fundamental Flaw

There is a fundamental, industry-wide flaw in the reporting of investment strategy allocations against benchmarks. Fund investments, including their underlying sector investment allocations, are typically determined on different software to that used to administer the fund. They may have been determined according to the fund’s investment strategy but, as the underlying asset sector allocations within the administrator’s...

Age 67 NCC Reminder

Just a reminder that an individual will automatically trigger the bring forward rule from 1 July 2020 if the member exceeds their general NCC cap for the year and the member is under 67 at any time in that year, member is not part way through an existing bring forward period, member’s TSB at the previous 30...

In Specie Contribution Trap

Paragraphs 27 to 30 of LCR 2021/2 have important ramifications to a relatively standard SMSF practice. It is not unusual for an asset to be acquired from a related party partly by way of a purchase for cash and partly by way of an in specie contribution. An example would be the acquisition of a $1m business...

Simply the Best SMSF Investment Strategy Documents

Superficially, all investment strategy document tools use the same approach. They provide you with a template that documents the investment strategy you have already decided upon - couched between appropriate extracts from SIS. In almost every case, these templates are notable for what they don’t say. They contain a significant amount of blank space for you...

Pension Changes Simplified

There have been so many words devoted to the recent pension changes, and those just introduced to parliament, that you could be forgiven for not understanding what has already happened and what will happen if the Bill becomes law. If a fund has only account based pensions for the full year it will not require an actuarial certificate. This sensible...

Director Identification Numbers Start Now

The requirement for a Director Identification Number has now started! The DIN is a unique and permanent identifier created to combat fraud. Eventually every director will have a single ID, irrespective of the number of directorships held. Any individual who is a director or acting as an alternate director, must register. This includes directors of an SMSF,...

Dealing with Excess Concessional Contributions

Last week I mentioned the unfortunate non-concessional contribution cap consequences of an excess concessional contribution. This week we’ll look at how to respond to an excess CC determination. The first step is to check the facts. If the determination of the excess is wrong, take immediate action to correct the ATO’s records. There is a 60-day time...

Important Pre-Non Concessional Contribution Check

Just this week we have seen two instances where a small excess concessional contribution was notified to, and disregarded by, the member because the personal tax liability that arose from leaving the contribution in the fund was minor. The additional consequence – the counting of the excess against the member’s non concessional contribution limit - was...

Valuing SMSF Investments in Unlisted Entities and Trusts

Auditors will often take a look-through approach when dealing with valuations of private company shares and unit trusts. This is because the ATO have advised [QC 26343] that company or unit trust financial statements that are signed and audited are unlikely to be sufficient evidence on their own, particularly if the assets have been valued at...