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]

Has a recent case changed industry practice? A significant number of SMSF trustees invest in related unit trusts. More and more of these trusts are post 1999 non-geared unit trusts that meet the requirements in regs 13.22C and 13.22D. Naturally, the unit trust trustees declare distributions to the SMSF trustees. SMSF trustees may want to [read more]

The recent AAT decision of Shail Superannuation Fund and Commissioner of Taxation [2011] AATA 940 highlights the importance of corporate trustees for SMSFs. Broadly, the decision resulted in a multi-million dollar tax liability for one co trustee due to the actions of another co-trustee. Recent data from the ATO indicates that 73% of all SMSFs [read more]

As we are now over the half way mark for this financial year, this SMSF update focuses on a number of important planning issues leading up to 30 June 2012. Contributions Concessional contributions (‘CC’)/Non-concessional contributions (‘NCC’) CCs are generally contributions which are included in the assessable income of the SMSF. An example of a CC [read more]

Controversial Taxpayer Alert 2010/2 was withdrawn on 29 November 2011. This alert questioned the effectiveness of certain SMSF deed clauses that reject excess contributions. These clauses have historically been used by SMSF trustees to reject contributions that would cause SMSF members to exceed their contributions caps. In the alert the ATO questioned whether such clauses [read more]

The ATO has released interpretative decision ATO ID 2011/77. It is highly relevant for SMSF succession planning. The scenario considered ATO ID 2011/77 considers when a stepchild ceases to be a child of a stepparent. Naturally, this is a vital question because: under the Superannuation Industry (Supervision) Act 1993 (Cth) a child is a dependant [read more]

The recent release of SMSFR 2011/D1 provides some much anticipated guidance on SMSF borrowing. While the ruling outlines a practical approach to many issues, it is still only in draft. Single acquirable asset It is common for SMSF trustees to acquire real estate comprising multiple titles. However, a separate borrowing is needed for each ‘single’ [read more]

Introduction — the problem There is an ‘elephant in the SMSF room’. That ‘elephant’ is the issue of what will happen to SMSFs when members lose capacity. The most recent ATO statistics show that of the 867,863 SMSF members: 56% are over 54 years old; and 22% are over 64 years old. Further, the statistics [read more]

The ATO recently released a draft ruling regarding pensions. It is very controversial and has significant implications for SMSF succession planning. We consider a key aspect of the ruling: reversionary pensions. What the draft ruling is about Draft taxation ruling TR 2011/D3 considers when an income stream (eg, a pension) starts and stops. This is [read more]

An SMSF trustee’s investment in a unit trust may be a prudent investment. However, as outlined below, there are a number of considerations that may impact this investment. Allowable investments Broadly, the in-house asset provisions contained in the Superannuation Industry (Supervision) Act 1993 (Cth) (‘SISA’) restrict SMSF trustees from investing in unit trusts. Particularly, an [read more]