The much anticipated Royal Commission report on our sector will be released by the government following close of share trading on Monday and we can expect the press to focus on little else for the next couple of weeks. Many participants and product providers have already pre-empted its findings and have made sweeping changes to their...
There's been some media coverage in recent days about the effect that Labor's tax proposal for discretionary trusts will have on SMSFs given that "SMSFs are commonly invested in discretionary trusts". This surprised me as SMSFs never invest in discretionary trusts. They only invest in fixed, or unit, trusts and these aren't included in Labor's proposal....
The increase in the SMSF member limit from 4 to 6 from 1 July will require either the return of the government at the next federal election or the introduction and passing of the enabling legislation in the few days that Parliament will sit before the election. Notwithstanding their superior economic credentials, the government has been working...
The ATO has reminded SMSF auditors about their professional obligations when verifying asset values in financial statements. This follows two recent Supreme Court decisions in which SMSF auditors were held to have breached their duty of care when auditing SMSFs which later suffered investment losses. In Cam & Bear Pty Ltd v McGoldrick [2018] NSWCA 110 (reported...
The new pension rules, combined with the ATO’s revised treatment of some existing practices surrounding exempt current pension income seem to increase the workload of actuaries. This is not so. The increased workload has fallen onto administrators and advisers. There are two methods of calculating exempt current pension income (ECPI); 1. Segregated – where all the fund is...
Two recent court decisions may well herald a rise in SMSF audit fees. It has long been understood that SMSF trustees should take responsibility for their own investment decisions. There have been claims against advisers and lawyers for inappropriate advice, but auditors have been relatively unscathed – until now. In both cases the trustees willingly entered into...
The move to 6 member SMSFs, presumably from 1 July 2019, has been largely regarded as a who-cares moment by SMSF advisers given that four members are already permitted but almost all current SMSFs contain only one or two members. If Labor wins the next election and removes franking credit refunds I predict there will be...
In case you haven’t yet seen an excess transfer balance determination you might be interested in the details of one that I’ve been given from an SMSF client who has just transferred his administration to us as a result. His previous accountant had not reduced his pension account to $1.6m as at 1/7/2017. Instead, his $2,876,913 pension...