Last week we considered the identification of related parties. This week we look at some related party acquisition issues. 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...
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...
Opportunities are being lost due to a general misunderstanding of the nuances of life insurance in SMSFs. A deduction for term life insurance premiums is allowable, irrespective of whether the premium is paid from an accumulation or a pension interest. Clearly this is irrelevant if the fund is totally in pension mode however, where a portion of...
We have never entered any sector award competitions so our general manager, Emma Walker, and her wonderful team have never been publicly acknowledged for the great work that they do. They have, however, been acknowledged by the ATO in a more meaningful way by being officially recognised as having achieved a score of 100% for on time...
How will SMSF administrators minimise the compliance risks and procedural disruption of the TBAR regime? This year, SMSF trustees must consider whether they are permanently locked into a quarterly reporting regime for certain pension events. All such SMSFs must lodge a TBAR for reportable events that occurred in the 17/18 financial year by 28th October and quarterly...
I confess I have a vested interest in supporting the government’s three yearly audit proposal so why am I totally opposed to it? “The objective of the measure is to incentivise good record-keeping and compliance by SMSFs whilst maintaining system oversight and integrity.” What this measure will achieve is quite the opposite. Significant incentives already exist for good...
This Snippet has been largely reproduced from an article by Greg Einfeld of Lime Actuarial who has nailed the changes that have been made to the calculation of exempt pension income. Hopefully the regulators will apply some common sense where the result of the changes is just plain silly but that is yet to be seen. The...
Our last Snippet focused on the future service benefit tax deduction. The example showed how a tax saving of about $87,000 could be made if a life insurance policy funded any part of the $1m payment to the member, or tax dependent, within the parameters described. The flip side is the consequence if the benefit is...