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Frequently Asked Questions

SMSFs

  1. Why should I choose a DBA SMSF?

    In short, DBA’s SMSF deed and related documentation is up to date and of the highest quality in Australia. Please click here for further information.

  2. What are the features of DBA’s deed or where can I get more information?

    See the questions and information under ‘DBA Deed’ below.

  3. Should my SMSF have a corporate trustee or individual trustees?

    We generally recommend that an SMSF have a corporate trustee, rather than individual trustees. See table below for further information:

    Corporate TrusteeIndividual Trustees
    Continuous succession
    A company has an indefinite life span; in other words, it cannot die. A company makes succession to control more certain on death or incapacity.
    Ceases upon death
    Timely action must be taken on death to ensure the trustee/member rules are satisfied. (SMSF rules do not allow a sole individual trustee/member SMSF.)
    Administrative efficiency
    On the admission or cessation of membership, that person becomes or ceases to be a director of the company. Thus, the title to all assets remains in the company's name.
    Extra and costly paperwork
    The admission or cessation of a member requires that person to become or cease to be an individual trustee. As trust assets must be held in all trustees names, the title to all assets to be transferred to the new trustees.
    Sole member SMSF
    You can have an SMSF where one individual is both the sole member and the sole director.
    Sole member SMSF
    A sole member SMSF must have two individual trustees.
    Greater asset protection
    As companies have limited liability, they provide greater protection where a party sues the trustee for damages.
    Less asset protection
    If an individual trustee suffers any liability, the trustee's personal assets are also exposed.
    Estate planning flexibility
    A company offers greater flexibility for estate planning, as the trustee does not change as a result of the death of a member.
    Extra administration and costs
    The death of a member gives rise to considerable administrative work and costs at an inopportune time.
    Lower penalties
    The administrative penalty regime that commences from 1 July 2014 typically only applies to a company once for each contravention.
    Higher penalties
    A penalty can be imposed from 1 July 2014 on each individual trustee for each contravention. Thus, having two individual trustees can double the administrative penalty that would otherwise apply to a corporate trustee.
    Overseas Members
    It is easier to evidence that the central management and control ('CMC') of a corporate trustee remains in Australia.
    Extra risk
    An SMSF with individual trustees would generally have greater difficulty showing its CMC remained in Australia.
    Lump sums and pensions
    An SMSF with a corporate trustee can pay benefits either as pensions or as lump sums.
    Lump sums or surrendering a pension
    A member must surrender their pension entitlement if they wish to obtain a lump sum (a fund must have its primary purpose of paying a pension). Thus, extra paperwork is needed to surrender a pension entitlement to a lump sum payment.

    Please carefully consider setting up the correct structure from the beginning, as significant costs and administrative effort is involved in any future change of trustee.

  4. Does my SMSF deed need updating?

    Any SMSF deed older than five years should be reviewed at a minimum. To help you decide whether your deed should be updated, please review the table below:

    Effective DateDescriptionImpact
    1 July 2014Concessional contribution capIncreased for those aged 49 or more on 30 June 2014.
    1 July 2014Insurance coverInsured benefits are generally only eligible to be paid on satisfying a valid condition of release.
    25 July 2013TR 2013/5ATO finalises draft ruling TR 2011/D3 and confirms a pension ceases on death (unless the pension is automatically reversionary) or if the minimum payment is not made in respect of a financial year.
    1 July 2013Concessional contribution capIncreased for those aged 59 or more on 30 June 2013.
    1 July 2013Excess contributions taxExcess concessional contributions taxed at a member’s marginal tax rate with a 15% offset provided. The limited system introduced on 1 July 2011(see below) phased out. The member can request the fund release money to pay this tax.
    1 July 2013Investment strategy requires regular reviewTrustees must undertake at least an annual review of their investment strategies and consider whether insurance in respect of their members should be effected.
    1 July 2013Assets at market valueTrustees must report assets at their market value for FY 2012–13 onwards.
    29 June 2013Extension of pension exemption following deathNew tax regulations extend the pension exemption on death where a member dies with a pension but that pension is not automatically reversionary. The pension exemption can continue until death benefit has been paid out provided it is done so as soon as practicable.
    1 July 201215% surchargeA new 15% tax imposed on certain concessional contributions for members with earnings exceeding $300,000 pa. The member can request the fund release money to pay this tax.
    21 March 2012SMSF trustee remunerationSpecial rules recognises remuneration for certain non-trustee duties.
    1 July 2011Excess contributions taxRefund of excess concessional contributions permitted below $10,000 for the first time offenders.
    1 July 2011TPD InsurancePremiums only deductible for any occupation total and permanent disability insurance. Any additional amount for ‘own occupation’ is not deductible.
    1 May 2011TR 2011/D3ATO issues controversial draft ruling on when a pension ceases. ATO consider a pension ceases on death unless the pension is automatically reversionary or if the minimum payment is not made in respect of a financial year.
    7 July 2010Borrowing laws updatedBorrowing laws are amended again, to address perceived shortcomings in the September 2007 provisions. Changes include the ability to refinance and acquire certain replacement assets.
    24 Sept 2007Borrowing lawsBorrowing laws are amended to allow funds to borrow on a limited recourse basis to acquire permitted assets (ie, via instalment warrant-type arrangements).
    1 July 2007Terminal Medical Condition benefitsNew laws and regulations enacted in early 2008 allow persons with a ‘Terminal Medical Condition’ to access their super as a lump sum tax-free.
    1 July 2007Substantial super reformsMajor reform of the superannuation system proposed to take effect.
    1 July 2007New income streamsNew account-based income stream (pension) and new transition to retirement income stream.
    10 May 2006Compulsory cashing abolishedCompulsory cashing rules are abolished, allowing members to accumulate indefinitely during their lives.
    10 May 2006Undeducted contributionsNew cap on undeducted contributions applies from 10 May 2006 to 30 June 2007 of $1 million and generally $150,000 p.a. thereafter.
    1 Jan 2006Contributions splittingMembers can split contributions received after December 2005 with their spouse. Only 85% of deductible contributions can be split.
    1 Jan 2006Allocated pension changesNew, longer life expectancy pension valuation factors (‘PVF’) apply to pensions commenced after December 2005. Pensions commenced prior to January 2006 continue to use the old PVFs.
    1 Jan 2006Market linked pension changesThe term of a pension commenced after December 2005 includes the option of the member’s 100th birthday less their age at commencement of the pension, eg, if member is 65 they can choose a term of 35 years. The member may also choose the pension to be paid to the spouse’s 100th anniversary.
    31 Dec 2005DBPs transitional relief ceasedSMSFs can no longer commence DBPs. From 12 May 2004 to 31 December 2005, SMSFs were required to satisfy certain criteria before a DBP could commence.
    1 July 2005Non-commutable pensions introducedMembers can now access a non-commutable allocated or market-linked pension on attaining preservation age. Older deeds may need to be amended to ensure eligible members can access these pensions.
    Sept 2004Market linked pensionsThis new type of pension was introduced with unique features.
    Mid-2004Gainful employment rules easedPersons under 65 do not need to satisfy the gainful employment test.
    Mid-2004Changes in the rules relating to when benefits paidNew test for when a benefit must be paid or commenced. Certain deeds needed updating to ensure compliance.
    12 May 2004Restrictions placed upon DBPsMembers of SMSFs now cannot be paid DBPs unless certain transitional rules are satisfied.
    Oct 2003Pro-rating rules for pensionsPensions commencing after September 2003 have new minimum pro-rating rules.
    Mid-2003PDSs introducedUpon certain events, a PDS might have to now be issued to members.
    1 July 2003Government co-contributions introducedGovernment co-contributions made to the fund. Many deeds only contemplated employer and member contributions.
    1 July 2002Greater flexibility with regards to contributions and compulsory cashing introducedCertain deeds needed updating to ensure compliance and to ensure internal roll-over provisions could be utilised.
    Mid-2001Internal roll-overs of super pensions now treated as ETPs and taken into account to RBL purposesCertain deeds needed updating to ensure compliance and to ensure internal roll-over provisions could be utilised.
    Mid-2000ATO replaced APRA as the regulator of SMSFsCertain deeds needed updating to ensure compliance
    8 Oct 1999Section 17A introduced, which includes the member/trustee rulesThe member/trustee structure of all SMSFs needed to be reviewed in order to ensure that s 17A was not being breached – some deeds required updating in order to ensure compliance.
    31 May 1999BDBNs introducedPreviously, SMSF trustees had a discretionary power as to whether and to whom to pay a member’s benefit upon death – all deeds needed to be updated to allow members to now make BDBNs to bind the trustee to pay their benefit to nominated person(s).

Companies

  1. Why should I order a company from DBA?

    Click here for information relating to ordering a new company from DBA.

Trusts

  1. Why should I order a trust from DBA?

    For information regarding why you should order a DBA trust, please read below:

    Some good reasons to use our trust deeds

    The importance of a quality trust deed

    • DBA provides high quality, innovative trust deed packages that provide maximum flexibility in relation to the latest planning strategies.
    • Buying a quality package actually saves you money. Our deeds are regularly reviewed and revised by some of Australia’s leading tax and succession planning lawyers so that the latest tax and trust law changes are accommodated. Each deed package is reviewed and signed-off by a lawyer.
    • DBA focuses on trust documentation and related services. We work at the ‘coal face’, handling technical queries on a daily basis. We have the resources and technical skills to keep up to date with ongoing developments and provide ongoing technical support and assistance throughout the life of the trust.
    • Our trust deeds are written to be easily understood and the trust easily administered. We cater for different types of amounts to be included in tax law income to ensure the deed is not restricted to trust law income. Our trust deeds are maintained by experienced taxation lawyers who keep abreast of important court or tribunal cases, ATO rulings or legislative amendments which affect the operation of our trusts.
    • Many other suppliers of trust deeds are using antiquated precedents and do not provide technical support, which can give rise to significant tax and legal problems.
    • A trust is difficult to vary. A subsequent variation of a trust deed can give rise to a raft of tax and stamp duty issues.
    • Because DBA is a leading tax, estate planning and superannuation law firm, we also provide related tax and succession planning advice and services.

Pricing

  1. Is GST included in the price?

    All prices quoted on this website include GST.

    Postage disbursement costs are also included in the quotes of fixed fee products.

SMSFs

  1. How do I order?

    Download the order form in Adobe Acrobat format by clicking on the order form button at the top of the relevant product page. (Alternatively, contact us and we will send you the form.) Email, send by post, or fax the completed form to our office.

  2. Should I send in payment when I send in the order form?

    Payment should only be made once an invoice has been issued to you.

Delivery

  1. How will products be delivered to me?

    Generally, our products are dispatched in PDF format via email.

    We can also courier standard products throughout Australia for same day or next day delivery. There is an additional cost for hardcopy documents and courier fees are added to the invoice.

  2. What does ‘POA’ mean?

    POA stands for ‘price on application’. If a product is marked POA, we can provide an estimate once we have a clear idea of what is required.

  3. Will you ever charge me more than the amount quoted on this website?

    As a general rule, no. However, where is a product is ordered without a completed DBA order form or without complete documents provided, we may need to contact you to advise that in order to complete the product the quoted fee may need to be adjusted. Also note that courier costs and other disbursements are generally not included in quotes but are added to the invoice.

    Also, prices do not include our time involved in advising you, meeting with you to sign or complete the documents or attending to the lodgment of forms with the ATO or State Revenue Office for affixing stamp duty. Therefore, advice and special instructions may give rise to an additional fee for professional services where it is outside the scope of a standard product order. Naturally, you will be advised if any additional professional charge will apply. Consultations, meetings and advice are charged on our hourly fee rates. If the service/product you order requires additional work, we will contact you for your approval before commencing the additional work.

  4. Are all prices quoted in Australian dollars?

    Yes.

DBA Deed

Due to the ongoing and substantial recent superannuation reforms, at least every five years, we recommend that everyone consider the need to upgrade their deeds. This is particularly critical where the members of an SMSF intend to consider superannuation or retirement planning in the near future.

We acknowledge that if deeds have been updated recently, some may prefer not to upgrade them again immediately and may do so on a case-by-case basis. We strongly recommend, however, that such deeds be reviewed in detail before any major decision is implemented, eg, commencing a pension, making substantial contributions, undertaking a limited recourse borrowing arrangement or undertaking their estate planning.

  1. How often must an SMSF’s deed be upgraded?

    An up-to-date deed is necessary to ensure compliance with the latest laws. It is also best practice for advisers to use up-to-date deeds for ease of administration of their clients’ funds and to maximise flexibility for their clients.

  2. Does DBA’s deed allow the trustee to borrow under a limited recourse borrowing arrangement?

    Yes. DBA’s deed allows the trustee of the fund to borrow in accordance with section 67A of the Superannuation Industry (Supervision) Act 1993 (Cth).

    Note, many deeds, issued prior to mid-2010, have insufficient powers which would not be accepted by banks who typically review all SMSF deeds before lending. All SMSF trustees proposing to borrow should have their deed thoroughly reviewed and upgraded if necessary as lenders typically closely scrutinise all prior deeds.

  3. How does succession to the ‘trustee’ role operate under DBA’s deed?

    DBA’s SMSF deed has been carefully drafted to maximise succession planning opportunities.

    The deed allows a member’s Legal Personal Representative (‘LPR’) to stand in as a trustee (or director of the corporate trustee) under DBA’s constitution if the member has died, is under a legal disability or, eg, has moved overseas and has appointed their LPR via an enduring power of attorney in order to ensure the fund remains a resident fund. These strategies are not always permitted under some deeds.

    If the fund has individual trustees, the deed also allows a member to nominate a ‘successor trustee’ during their lifetime to step in on their death, which helps to minimise the uncertainty of who will take control of their fund after the death. Note, if the fund has a corporate trustee, any nomination of a ‘successor director’ must be provided for in that company’s constitution (DBA’s company constitution allows this nomination to be made: Click here for more information on DBA’s company).

  4. Does DBA’s deed allow for the new types of pensions?

    Yes. The deed allows account-based pensions and transition to retirement income streams (‘TRIS’) to be paid.

    The deed also facilitates a TRIS becoming an account-based pension once the member has satisfied a condition of release (eg, retirement or attaining 65 years).

  5. Does DBA’s deed allow for a binding death benefit nomination (‘BDBN’)?

    Yes. DBA deeds post-June 1999 enable members to make BDBNs. Please refer to the BDBN information on our website for further information.

  6. Does DBA’s deed come with a product disclosure statement (‘PDS’)?

    Yes. All DBA deeds (both new and varied) come with a personalised PDS for each Member at no extra cost. Please refer to the PDS information on our website for further information.

    We are aware of many deed suppliers who rely on an exemption in the Corporations Act 2001 (Cth) to avoid supplying a PDS or do not provide a separate PDS to the deed. However, this exemption is difficult to satisfy and raises significant compliance risks. Further, the PDS assists advisers in informing their clients about the features of an SMSF and is an invaluable educational tool and therefore minimises the risk of adviser liability.