Self-Managed Superannuation Funds

Self-Managed Superannuation Funds (SMSF) are super funds primarily used by famiies to grow their wealh

  • 112AreasOfConcernForSMSFTrusteesIf you are the trustee of one of the approximately 577,000 SMSFs in Australia at the moment, there are some areas the ATO wants you to pay particular attention to including the sole-purpose test, the in-house asset rules, unlawful schemes and arrangements, and dividend-stripping

  • ASIC enforcement action on SMSF auditorsASIC has released information on its enforcement action against over 100 SMSF auditors (some referred to it by the ATO for various breaches including not meeting independence requirements, not complying with auditing standards, not reporting non-compliance, and not meeting the fit and proper person requirement).

  • ASIC recommends SMSF reforms

    ASIC recommends SMSF reformsAs a part of hearings into ASIC’s oversight functions, the regulator presented the Parliamentary Joint Committee on Corporations and Financial Services with a range of policy solutions to be considered to remedy deficiencies identified in the SMSF space from its recent reports.

  • 096BewareOfTheSMSFDeathTrapDeath of a family member is often a difficult time, but if the deceased was a member of SMSF, complications from trustee arrangements and payment of the death benefit can make a difficult time even worse for the family members. A recent dispute that reached all the way to the Victorian Supreme Court serves as another reminder that a deceased person’s will does not override the discretionary power of a SMSF trustee to determine the payment of a death benefit.

  • 157BorrowingMoneyinSMSFs 720x454Limited recourse borrowing arrangements (LRBAs) allow an SMSF to borrow money for the purchase of a single asset (or a collection of identical assets that have the same market value) to be held in a separate trust. Investment returns from the asset go to the SMSF and if the loan defaults, the lender’s rights are limited to the assets held in the separate trust.

  • 154SMSFSolePurposeTest 720x454The sole purpose test is one the fundamental requirements for SMSFs to obtain tax concessions. It requires that the SMSF be maintained for the sole purpose of providing retirement benefits to its members or their dependents if a member dies before retirement.

  • Corporate SMSF Trustee BenefitsSetting up a new SMSF does involve some cost, and one of the decisions you’ll need to make is whether it’s worth paying to establish a new company to act as trustee.

  • Lending to your SMSFThinking about a gearing strategy for your SMSF? It’s possible to borrow from a related party, but you must structure the loan terms correctly or else face significant tax penalties.

  • LRBA changes may hinder SMSF gearingLimited recourse borrowing arrangements have allowed many SMSFs to successfully invest in assets they otherwise would not have been able to acquire.

  • SMSF Overseas StrategyTaking an extended job posting overseas? If you currently have an SMSF, you’ll need a strategy for managing your super to ensure your fund doesn’t breach any residency rules. Know your options and plan before you go.

  • 155SettingUpSMSF 720x454Setting up your own self-managed super fund (SMSF) can be a complex task even before you seek registration with the ATO. It’s important that the SMSF be set up correctly for the sole purpose of providing retirement benefits for their members.

  • 091SMSFAuditorWhatYouNeedToKnowAre you the trustee of an SMSF? Then you should know all about the obligation to appoint a registered auditor to audit your SMSF every year. If you’ve been with the same auditor for some years, it may be wise to make some additional checks in relation to registration and auditor independence to ensure that you and your fund are covered.

  • SMSF diversification requirementsWhile many trustees will know that self-managed super funds (SMSFs) are required to prepare and implement an investment strategy, what they may not know is that specific factors have to be considered in forming the investment strategy including the risk of inadequate diversification.

  • SMSF sole purpose test and fractional investments court decisionPreviously, it was thought that any benefit provided directly or indirectly to members or related parties of an SMSF from an investment would contravene the sole purpose test. However, a Full Federal Court decision has reframed the sole purpose test which will provide some flexibility to trustees on certain investments.

  • SMSF trustees must watch their related party expensesThe tax laws that penalise uncommercial transactions between SMSFs and related parties are set to get tougher, with an SMSF’s expenses to come under the spotlight.

  • Super funds copmpared: Part 2Insurance and dispute resolution might not be high on your list of things to consider when starting up an SMSF, but these issues do affect SMSFs differently to public offer funds. What will you do if a dispute arises between SMSF members, and what does taking out insurance in an SMSF practically involve?

  • Super funds comparedFor many people, SMSFs are a great option for building retirement savings, but they may not be suitable for everyone. Before you jump in, make sure you understand the differences between SMSFs and other types of funds to help you make an informed decision.

  • SMSFs: ATO to check on investment strategy complianceOver 17,000 SMSFs that are heavily invested in one asset class will soon receive a “please explain” from the ATO to check whether they can justify their diversification risk.

  • 126TaxableAssetsIncreaseNew research has shown the transfer balance cap and reduction of tax concessions for transition to retirement pensions have achieved their policy outcome and made more SMSF assets taxable.

  • 137SMSFAuditCycleHow often must your SMSF be audited? Currently it is every year, but the government has proposed to extend this to a 3-year cycle. The benefits are meant to be less red tape and lower costs, but there are concerns that this may not be the outcome.

  • SMSFsComplianceTrapsSMSFs can be a great investment vehicle for those prepared to get the compliance side of things right. The ATO takes SMSF regulation seriously and has now revealed the top three contraventions it sees among SMSFs.

  • Valuing your SMSF assets: know the requirementsRecording the market value of your SMSF’s assets is an important trustee responsibility. But how do you prove “market value”, how often must you value assets and when do you need to hire an expert valuer?

  • Want to manage your own super? Setting up an SMSFA self-managed super fund (SMSF) is a way to prepare for retirement that gives you more control and freedom of choice over your investments than other types, such as retail or industry super funds. As an SMSF trustee, you can invest in almost any type of valuable asset, from property to shares or even items like artwork.

  • SMSF Business Property TransferTransferring a commercial property into an SMSF can be a great way to build retirement savings and take advantage of the concessionally taxed SMSF environment. But when acquiring property from a related party, it’s vital the property meets the “business real property” test

  • 077WorkingOverseasAndYourSMSFPart1When you go overseas to work or travel for an extended period of time, ensuring that your SMSF stays complying is probably the last thing on your mind. That is exactly why you should pay attention since your SMSF may have issues meeting the central management and control test as well as the active member test.

  • 082WorkingOverseasAndYourSMSFPart2This week we look at the active member test and how it may affect the complying status of your SMSF. The active member test is one of 3 tests which all have to be met at the same time for an SMSF to be an Australian superannuation fund and thus a complying fund. It is a complex area where the outcome is largely dependent on the individual circumstances of each case.

  • Superannuation Fund Extra MembersYour SMSF may soon be able to have up to six members. A large member group in an SMSF creates a number of important planning issues that need to be carefully managed