News

Employee Share Schemes & SMSFs

Recently I was asked if an employee, offered discounted shares in her unlisted employer under an employee share purchase scheme, could acquire them via her SMSF. Quite apart from any ownership restrictions contained in the employee share plan offer, from an SMSF position, the answer is no. As the rights to acquire the shares attach to the...

Illegal Early Access Payments

On occasion, SMSF members illegally access preserved benefits. Even though this constitutes a breach, if the amount is repaid quickly, and with interest, and it’s the first time it’s happened there will generally be no consequence. If inaction and the passage of time demands it be processed as a benefit payment then it will be included...

How Much is Enough to Start an SMSF?

The SMSF Association has released a report prepared by the University of Adelaide which has overturned some established SMSF myths. The report was largely in line with the previous findings of Rice Warner but involved a huge sample of over 300,000 funds. Essentially the report found that ASIC’s view that SMSFs holding less than $500k are uncompetitive...

Which Pension Income Choice is Best?

Our last week's summary of the changes to super legislation avoided discussing the pension choices that apply in this financial year. We will consider them now. SMSF trustees can now choose from 2 alternative methods of calculating how much pension fund income is exempt from tax. For some the choice is easy. If a fund contains nothing but...

New Super Laws Summarised

Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 has now passed both houses of Parliament. Once it receives the formality of Royal assent it will become law so what does it change? In the current 2021/2022 Financial Year SMSF trustees can choose the way in which the fund’s tax-exempt pension income...

SMSF Property Withholding Tax Not Limited to Cash Transactions

Even though the 12.5% CGT withholding regime was introduced to catch foreign transactions it requires the satisfaction of procedural obligations to exclude its application to any sale or acquisition of real property (vacant land, buildings, residential and commercial property) with a market value of at least $750,000. It may also include transfers of share or units...

SMSF Legacy Reserves Strategies

SMSF residual reserves are a challenge to trustees wishing to distribute them. It is expected that, when the regulations allow the rollover/cessation of legacy SMSF defined benefit pensions, the number of funds with this issue will increase. One solution is to make a reserve distribution to member accounts. Provided the distribution is prorated across all eligible members,...

Australian Death Notification Initiative

A new government death notification initiative facilitates contact with multiple organisations using a single online notification. It’s intended to minimise the paperwork involved in estate administration. Once a notification is lodged, it is sent to all participating organisations who will then make contact to begin their processing. Currently all state and territory governments are signed up to...