Author: David Busoli

Life Insurance – Who Pays?

Life insurance in SMSFs requires special consideration. Quite apart from the extra tax deduction gained from the future service benefit or the impost of extra tax where proceeds are not paid to tax dependants, there is the issue of who pays the premiums. Premiums must be debited to the insured’s account but which account? If the member...

SMSFs Score Highly

The SMSF Association has just released their review of the Australian Taxation Office’s 2016-17 statistical overview of SMSFs. Given the amount of pre-election SMSF negativity it makes a very exciting read with highlights like; The average SMSF establishment size rose to $521,000 compared with the relatively stable levels of $370,000 in the previous four years –...

Income Streams & Death

The ATO has released an explanatory note Death benefit income streams – meeting minimum pension payment requirements to clarify what is required on death. Unfortunately it is confusing in that it misses a couple of rather important items. Pension minimum requirements in the year of death are only applied to reversionary pensions. Non-reversionary pensions are exempt from...

Related Party SMSF Loans

The ATO have updated the interest rates to be charged for related party limited recourse borrowing loans that seek to comply with the safe harbour provisions. Where the secured asset is real property the rates are; 2019/20 - 5.94% 2018/19 - 5.8% 2017/18 - 5.8% 2016/17 - 5.65% 2015/16 - 5.75% Where the secured assets are listed securities the rate is 2% higher...

Important Trustee Clarification

Dawson v Dawson [2019] NSWSC 82 confirms several matters that have always seemed self- evident but it’s always great to have a case law example as well. The case confirmed that; When a trustee is appointed pursuant to an enduring power of attorney they are personally appointed. They do not represent the appointor. They act independently in...

Super Changes from 1 July

The 1 July 2019 changes to life insurance under the Protecting Your Superannuation Package Bill have been largely reported on, but are worth repeating, just to be sure you’ve got the message. In the SMSF context, there are numerous situations where members have rolled in most of their balance from an APRA fund, but not all, as...

In-Specie Double Contribution

A reader of yesterday’s post has asked if there are any issues with making an in-specie contribution to an unallocated contributions reserve. There are no issues if the whole of the in-specie asset is to be added to the reserve but the ATO have previously disallowed the splitting of an in-specie contribution. Let’s say we have John,...

Double Contribution Strategy

As this is June you may like to consider the feasibility of a double contribution using an unallocated contribution reserve. The strategy involves making an additional contribution in June that will be allocated towards the member’s contribution caps in July. (The requirement is that such contributions are allocated within 28 days of the following month, so...

EOFY SMSF Checklist

End of Year SMSF Checklist This check list includes matters that aren’t exclusively End of Financial Year but might be also addressed at this time for the sake of convenience. Some items constitute financial advice so require licensing. Check that concessional contributions have not breached the $25,000 limit. Remember that, if they have, the excess may count...

Spouse Contribution Splitting Strategy

A spouse contribution split can be of assistance in reducing a member’s total super balance below one of the trigger points or, adopted as an ongoing strategy, a means to achieve a measure of account equalisation between spouses. To be eligible, the receiving spouse must be under age 65 and, if over preservation age, not retired. Where...