Strategy Matters

Promissory Notes

There are always those who leave their super contributions to the last minute. As a contribution is not made until it is received by the fund, invariably, some don’t quite make it in time. A contribution is made by cheque if the trustee receives it by June 30th, the cheque is banked in early July and it’s...

Work Test Exemption

The new ‘simplified’ work test exemption, from 1 July 2019, will allow individuals to have an extra financial year in which contributions can be made after the year in which they last met the work test. Therefore, contributions will be allowed in the year even though the individual has not worked in the financial year provided...

Downsizer Contributions

From 1 July 2018, members of at least 65 years of age may be able to make a downsizer contribution into your super of up to $300,000. The contract must have been entered on or after 1 July 2018 and the property must be the member’s home or a property that qualifies for a main residence...

Related Parties

The SIS Act pays special attention to the inherent conflict of interest that exists in all SMSFs due to the trustees being the members and vice versa. This limits the financial dealings that the fund can have with related parties so identifying who these are is vital. SIS sec 10(1) defines these as a member, standard...

Related Party Acquisitions

Generally, an SMSF can only acquire unlisted shares from a member or associate if the company is related. This is because the shares would constitute in-house assets. Naturally, the acquisition would only be allowable if it did not cause the total level of in-house assets in the fund to breach 5%. This creates a paradox. An SMSF...

In House Assets

An in-house asset is any of the following: a loan to, or an investment in, a related party of your fund an investment in a related trust of your fund an asset of your fund that is leased to a related party. There are some exceptions, including: business real property that is leased between your fund and a...

Bitcoin

The ATO states that, SMSFs that use bitcoin as an investment may be subject to capital gains tax rules when they dispose of it, as they would for shares of similar assets. Record-keeping requirements are similar to other transactions. SMSFs should keep records of: the date of the transaction the amount in Australian dollars what the transaction was...

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...

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...

SMSF Event Based Reporting

SMSFs have new reporting obligations for transfer balance caps. The transfer balance account report (TBAR) that is used to report certain events is a separate form from the SMSF annual return (SAR). The TBAR enables the ATO to record and track an individual's balance for both their transfer balance cap and total superannuation balance. SMSFs began event-based reporting...