Section 295-470 of the ITAA (Future Service Benefit) allows a Fund to claim an income tax deduction on the payment of: 1. a superannuation death benefit; or 2. a terminal illness benefit; or 3. a disability superannuation benefit or 4. a temporary incapacity income stream. The deduction, also known as the Future Liability deduction, is available irrespective of whether the benefit...
Legislation is now going before Parliament on the contentious issue of the inclusion of the outstanding balance of a limited recourse borrowing in the calculation of a member’s total super balance. Though I remain totally opposed to the recasting of debt as an asset and believe that this measure is poorly considered and inequitable at least...
We have prepared a comprehensive SMSF end of year check list that we strongly suspect is the most comprehensive you would have seen published. It's available here....
If an SMSF and a related party, including a related SMSF, plan to purchase an ungeared property the simplest and least expensive method may not necessarily be the best. If the property is acquired as tenants in common, and it is intended that the SMSF acquire the other party’s equity in the future, this would NOT be...
For a budget that has been relatively quiet on superannuation there have been quite a few tweaks of significance. To correct an unfair technical anomaly, it is proposed that reversionary transition to retirement income streams be subject to the same tax exempt treatment on earnings as reversionary pensions in the retirement phase. This would be a welcome...
SMSF trustees can’t be paid by their fund for performing their trustee duties but they can potentially be paid for other activities. To be eligible, the trustee must be qualified to provide the service, offer the service to the market and charge at market value. It’s not uncommon for trustees to want to remain unpaid however...
If a fund increases in value for any non-investment related activity the increase will be a deemed contribution. Most commonly this occurs when an expense is paid on behalf of the fund without reimbursement or a fund asset is improved for no consideration. Where the action can be attributed directly to a member or their spouse...
Many practitioners may disagree with much of the ATO’s interpretation of the law and their use of the Sole Purpose Test and Part IVA provisions however, to ignore it, is to place your clients in an invidious position. No one wants to be the test case. So, what is the ATO’s position? Reserves cannot be used to...