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DBA Monthly Newsletters

Excess contributions tax

Prevention is better than cure The trap of excess contributions tax (‘ECT’) may await those who have put in place pre-set measures to contribute, without regard to the now reduced caps for 2012–13 and 2013–14 financial years. Of course, if you were 50 years old or over, your annual concessional contributions cap for the 2009–10, [read more]

How to execute a deed

Deeds are vital in the SMSF industry. The governing rules of SMSFs are almost always contained in deeds. Yet few people fully understand what a deed is and how to implement one. We run through some key rules that are often forgotten … even by lawyers! What is necessary to be a deed At common [read more]

Mid-year budget — are auto-reversionary pensions still necessary?

The Federal Government’s October 2012 Mid-Year Economic and Fiscal Outlook (‘MYEFO’) included an important announcement that provided a great boost of confidence to the SMSF industry. Namely, with effect from 1 July 2012, a tax exemption will apply following the death of an SMSF member in receipt of a pension until that pension has been [read more]

Can an estate or trust distribute or gift assets to an SMSF?

This topic has gathered some interest in recent times after the ATO considered the following issue: Whether or not there is a breach of s 66 of the SISA, if an SMSF purchases residential property from the estate of a member’s deceased uncle. The ATO responded that the answer depends on whether the executor of [read more]

All investment strategies must change!

Insurance The Cooper Review recommended that the Government amend the investment strategy laws so that SMSF trustees are required to consider life and TPD insurance. The Government agreed with this recommendation and has passed legislation accordingly. See reg 4.09(2)(e) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (‘SISR’). However, the text of the actual law [read more]

Latest on TR 2011/D3

Draft taxation ruling TR 2011/D3 has proved very controversial. It was slated to be issued in final form on 25 July 2012. However, the ATO now lists the planned issue date as ‘TBA’. Given the uncertainty as to when it will be finalised, we now take stock of two of its most controversial aspects and [read more]

SMSF wind ups

In the 2011 financial year, for every 10 SMSFs that were established, one was wound up. This ratio has been broadly consistent over the past eight years. With so many SMSFs being wound up each year, advisers need to ensure that they are aware of the key aspects of SMSF wind ups and the associated [read more]

SMSF borrowing ruling

The ATO has recently released SMSFR 2012/1 (being the final version of draft ruling SMSFR 2011/D1). It outlines the ATO’s views on certain aspects of limited recourse borrowing arrangements (‘LRBAs’) including improvements, multiple assets and off-the-plan purchases. Single acquirable asset In determining whether an asset will be deemed to be a ‘single acquirable asset’, the [read more]

Contributions tax to double for some

Introduction It has been reported that the tax on concessional contributions is set to double for those earning more than $300,000. Consider Bob, who earns a salary of $350,000. In the 2013 financial year Bob’s employer would typically be obligated to make superannuation contributions of about $16,400. (The $16,400 is calculated as 9% multiplied by [read more]

ATO and contribution reserving in ATO ID 2012/16

Introduction ATO ID 2012/16 provides support for contribution reserving. A contribution reserve holds any unallocated contribution to a fund. The contributions are then subsequently allocated to a member’s account. The allocation generally must occur within 28 days after the end of the month in which the contribution is received. ATO ID 2012/16 — the facts [read more]