Author: smsf

Contribution Splitting

Under certain conditions, members may relegate their concessional contributions with their spouse. This is called a contribution split. An eligible spouse will be; under preservation age or between preservation and 65 and not retired or between 60 and 65 and has not terminated gainful employment after age 60 The contribution will need to have been made in the...

The Royal Commission

The much anticipated Royal Commission report on our sector will be released by the government following close of share trading on Monday and we can expect the press to focus on little else for the next couple of weeks. Many participants and product providers have already pre-empted its findings and have made sweeping changes to their...

Is Labor’s Trust Tax Relevant to SMSFs?

There's been some media coverage in recent days about the effect that Labor's tax proposal for discretionary trusts will have on SMSFs given that "SMSFs are commonly invested in discretionary trusts". This surprised me as SMSFs never invest in discretionary trusts. They only invest in fixed, or unit, trusts and these aren't included in Labor's proposal....

6 Members from 1 July?

The increase in the SMSF member limit from 4 to 6 from 1 July will require either the return of the government at the next federal election or the introduction and passing of the enabling legislation in the few days that Parliament will sit before the election. Notwithstanding their superior economic credentials, the government has been working...

SMSF Mandatory Reading

SMSF Adviser published an article by Deanne Firth of Tactical Super that I feel should be retained to provide to SMSF trustees who complain about having to justify their related party transactions. Essentially, a member drew loans, in multiple tranches over three years, totalling $90,000. Each tranche incurred an administrative penalty resulting in a total penalty of...

Valuation at Audit Time

The ATO has reminded SMSF auditors about their professional obligations when verifying asset values in financial statements. This follows two recent Supreme Court decisions in which SMSF auditors were held to have breached their duty of care when auditing SMSFs which later suffered investment losses. In Cam & Bear Pty Ltd v McGoldrick [2018] NSWCA 110 (reported...

More Responsibility for Advisers due to Pension Changes!

The new pension rules, combined with the ATO’s revised treatment of some existing practices surrounding exempt current pension income seem to increase the workload of actuaries. This is not so. The increased workload has fallen onto administrators and advisers. There are two methods of calculating exempt current pension income (ECPI); 1. Segregated – where all the fund is...

Property & SMSFs

SMSFs have been carrying on property development activities ever since SMSFs came into existence. Yet despite that there is still a common concern that such activities will cause the SMSF to become non-compliant, or subject to penalties, on the basis that such activities, and in particular undertaking a property development business, are prohibited. There is no express...

6 Member SMSFs – Who Cares?

The move to 6 member SMSFs, presumably from 1 July 2019, has been largely regarded as a who-cares moment by SMSF advisers given that four members are already permitted but almost all current SMSFs contain only one or two members. If Labor wins the next election and removes franking credit refunds I predict there will be...

This is what an Excess TBA Determination looks like

In case you haven’t yet seen an excess transfer balance determination you might be interested in the details of one that I’ve been given from an SMSF client who has just transferred his administration to us as a result. His previous accountant had not reduced his pension account to $1.6m as at 1/7/2017. Instead, his $2,876,913 pension...