News

Planning Property Purchases

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...

Super Budget

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...

Trustee Remuneration Trap

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...

Beware of Deemed Contributions

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...

SMSF Reserves – The Devil is in the Detail

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...

ATO View on SMSF Reserves

The ATO has confirmed that they will closely scrutinise SMSF reserves that have been established from 1 July 2017 to determine that their use is not to circumvent the transfer balance cap or total super balance restrictions. Though they acknowledge that there are legitimate uses for reserves, the ATO will be looking at the unexplained creation of...

Enhance Your Current Year NCC Eligibility

The primary relevance of the 30 June 2017 total super balance is its effect on a member’s eligibility to make non-concessional contributions in the current financial year. Where the amount is over, but close to, the trigger points of $1.4m, $1.5m and $1.6m enhanced eligibility will be obtained if the TSB can be reduced below these...

Downsizers Beware

There’s a lot of Downsizing information being distributed at the moment. I am concerned as a major eligibility requirement is often being ignored or incorrectly stated. Not only does the ability to make downsizing contributions commence after 30 June 2018, the contract of sale for the property must be after that date as well. If the sale...