News

$600k SMSF Tax Deduction

Sadly, one of our 45 year old SMSF members has received a terminal illness benefit payout of $1m into his fund. This has increased his balance to $1.3M and provided the fund with the ability to create a $600k income tax deduction. As is often the case, there is more to this than meets the eye. I...

No 6 Member Funds This Year

Now that March has passed us by without the 6 member SMSF rule having being passed the earliest it can come into force is 1 July. This is because, even if this measure is passed before the end of this financial year, it cannot become law until the first quarter after receiving Royal Assent. That makes...

The Problem With Related Party SMSF Loans

With the withdrawal of most lending institutions from the limited recourse borrowing space there has been a rise in the number of back-to-back loans. This can be problematic. Under this scenario, a bank will lend directly to a member or related party on terms that, necessarily, do not include the superannuation fund. The member, or related entity,...

Total Super Balance Reduction Strategies

The Total Super Balance can provide eligibility to an additional $100k non-concessional contribution or previously unused concessional contributions by merely being $1 under the applicable limits as at 30 June the previous year. There are some strategies that you can adopt to help reduce a member’s total super balance. These include; making a withdrawal just prior to...

Bring Forward NCCs – this year v next year

The tables below show the non-concessional contribution bring forward differences between this year and next year. This year (2020/2021) TSB at Previous 30/6 Max NCC From $1.6m Nil $1.5m to under $1.6m $100k $1.4m to under $1.5m $200k Under $1.4m $300k Next Year (2021/2022) TSB at Previous 30/6 Max NCC From $1.7m Nil $1.59m to under $1.7m $110k $1.48m to under $1.59m $220k Under $1.48m $330k   As you can see, the differences can be a little tricky....

Transfer Balance Cap Indexation Strategies

As previously noted, the Transfer Balance Cap will increase from July 1st this year. Following on from this, and the unwieldy system of calculating the individual TBC for existing superannuation pensioners, I have been approached to consider strategies which will allow existing pensioners to receive the full $100k increase. Unfortunately, once a member has registered a transfer...

Increase to Transfer Balance Caps

Based on the current rules, the effect of the December 2020’s quarter CPI increase will be to increase the general transfer balance cap from $1.6M to $1.7m from 1 July 2021. Confusion will be the primary result. Only members who have not yet commenced a pension will be eligible for the new $1.7m TBC. For a member whose...

Div 293 Blunders

We have encountered a number of instances where Div 293 payments have been paid by an SMSF without first obtaining the ATO’s approval. These will be treated as loans and will need to be repaid. They will also raise an audit comment. Please ensure you follow the correct procedure if paying from the SMSF as per the...