An SMSF trustee is required to reject contributions in certain circumstances. This rejection rule can prove very helpful for overcoming an excess non-concessional contribution (‘NCC’). Advisers must be aware of how this rule works if they seek to rely on it. Fund-capped contributions can be rejected Regulation 7.04(3) of the Superannuation Industry (Supervision) Regulations 1994 [read more]
I presented at the 2015 SMSF Association 2015 National Conference on 18 February 2015. It was a great conference and the SMSF Association should be congratulated. My seminar covered various methods of providing for children and future generations both via superannuation (including SMSFs) and outside of super via companies, trusts and other methods. In particular, [read more]
In certain cases, members can claim a deduction for personal contributions made to a superannuation fund. In order to claim this deduction, it is essential that the appropriate paperwork is in place. However, there is a trap that many unknowingly trigger, rendering many personal contribution deductions invalid! Background Section 290-150 of the Income Tax Assessment [read more]
Many have wanted to pay superannuation benefits — particularly death benefits — by way of mere journal entry. The ATO have clarified their position in this regard by publishing two interpretive decisions on Friday, namely, ATO Interpretive Decision ATO ID 2015/2 and ATO Interpretive Decision ATO ID 2015/3. The facts Each of ATO ID 2015/2 [read more]
Treasury released draft legislation today that will impact limited recourse borrowing arrangements. We consider the major changes for SMSFs and limited recourse borrowing arrangements. Background Naturally, in order for a trustee of a superannuation fund to be allowed to borrow, the asset must be held on trust for the trustee of the superannuation fund. To [read more]
Generally, a pension must be paid in cash. However, not every SMSF has ready cash to satisfy the minimum. Thus, it provides much needed flexibility when a pension can be satisfied in kind, eg, by way of an off-market transfer of listed securities, to ensure the pension exemption can continue and the minimum annual payment [read more]
I will be once again returning to the University of Melbourne to impart some of the knowledge I have gained in the 30+ years working in the fields of superannuation and tax. Having presented at the University of Melbourne previously, it is great to have the chance to go back and present on how the [read more]
Two ATO Interpretive Decisions (ie, ATO ID 2014/39 and ATO ID 2014/40 both published on 12 December 2014) address the question: Will ordinary or statutory income derived by an SMSF under a limited recourse borrowing arrangement (‘LRBA’) be non-arm’s length income (‘NALI’) of the fund pursuant to s 295-550 of the Income Tax Act Assessment [read more]
ATO Interpretive Decision 2014/22 addresses the question: ‘Can an adult child be a ‘death benefits dependant’ of his or her deceased parent for the purposes of section 302-195 of the Income Tax Assessment Act 1997 (Cth)?’ The adult child was considered to be a death benefits dependant for the purposes of this section. Tax definition [read more]
True to its word, on 10 October 2014 the Government introduced draft legislation, which proposes practical and long-awaited changes to the treatment of excess non-concessional contributions (‘NCCs’). This article outlines the tips and traps associated with the proposed changes. Details of the draft legislation The draft legislation takes the form of the Tax and Superannuation [read more]
