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...
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...
The proposed retirement income covenant creates some interesting reading for financial planners. It will place an obligation on superannuation trustees to formulate, review regularly and give effect to a retirement income strategy outlining how they plan to assist their members to balance key retirement income objectives. Trustees will be expected to assist members to make decisions such...
It is compulsory to use SuperStream from 1 October 2021 if any benefits are being rolled in or out of an SMSF in cash. This means it does not apply to: “in specie” rollovers, “internal” rollovers, pension commutations, contribution splitting transfers (unless to a different fund), or payment splitting transfers between former spouses/de factos. For all other...
Subject to proper documentation, commercial terms and need, if rental or loan repayment relief involving an SMSF, related non-geared company or unit trust, or a related tenant in the form of a reduction, waiver, or deferral gives rise to a contravention of the super laws, the ATO will not take any compliance action against the fund. If...
With effect from 1 July 2021, the signatory requirements on accounts and statements for any SMSFs [SIS s.35B(3)(a) and (b)] are: if the SMSF has a corporate trustee: if the corporate trustee has 1 or 2 directors: each director must sign, otherwise at least half the directors must sign, if the SMSF has individual trustees: ...
Administration penalties have become the ATO’s preferred compliance breach consequence. They are applied to SMSF trustee/directors personally and, as they can be as high as $12,600 per infringement, they are significant. The penalty is levied on a per trustee basis for individual trustees and collectively for all directors of a corporate trustee - a powerful argument...
The ATO has published a fact sheet to explain the impact on contribution caps if compensation amounts are received from financial service providers due to inappropriate advice or fees for no service. Here’s a summary. If the super fund engaged the service provider. This will not be a contribution. If the member personally engaged the provider. ...
Since 2016, when the full implementation of the restrictive rules surrounding SMSF investments in collectables commenced, there has been a marked reduction in the number of funds holding this class of investment. We are now seeing some increased exposure as trustees look for alternative investment options, but I suspect that many are not also considering the...
SMSF investments in unlisted shares or units in a “private” unit trust are generally permissible subject to the deed, investment strategy and acquisition source but should also be considered in light of tax and audit requirements. Such entities often have a tax lodgement date that is later than the SMSF’s. This is particularly problematic when the SMSF...