Tag Archives: legislation

Have you considered what you will do if an unexpected event occurs?

Your SMSF is a long-term plan.  Much can happen during this time including illness, incapacity or death of a member.

It is best practice to have contingency plans in place to deal with unexpected events. For example, if a fund member dies, leaving you as the sole member are you happy to continue with the SMSF?

Outlined are some issues to consider planning for as trustees.  Leaving the planning to when, and if an event happens may be too late.

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Franking credits and your SMSF

You may have noticed significant media coverage recently regarding the Australian Labor Party’s proposed policy to stop SMSFs from receiving tax refunds for the franking credits they receive in conjunction with the dividends paid from Australian companies they own.

First of all, what are franking credits and how do they benefit SMSFs?

Under the Australian tax system companies pay 30 per cent tax on their profits. When these profits are then passed on to their shareholders in the form of dividends, the company also hands the shareholders a credit for the tax the company has already paid (the “franking credit”). The individual shareholder then pays tax on the profit they received from the company less the credit for the tax the company has already paid.  The franking credit ensures that the company profits are taxed at a shareholder’s marginal tax rate.

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Crypto Currencies

This is an area that is becoming increasingly discussed within the self-managed superannuation fund (SMSF) environment and we encourage those that are interested in this type of investment contact us first to discuss the implications as there is no ‘one size’ fits all.

Some areas of compliance to review but not limited to, are:

  1. Separation of assets – An electronic crypto currency wallet is a pre-requisite for purchase, one of the potential issues here is that some providers do not cater for self-managed superannuation fund (SMSF) titles on this wallet. .
  2. Acquisition from a related party – Ensure that this purchase is made from an independent third party.
  3. Investment strategy – This will need to be reviewed, and potentially updated, to ensure this is an allowable investment by the Fund.
  4. Trust Deed – As with your SMSF’s investment strategy, this will need to be reviewed, and potentially updated, to ensure this is an allowable investment by the Fund.

 Please note that there are taxation rulings and determinations issue by the Australian Taxation Office (ATO) and capital gains tax rules may apply to the disposal of the asset.


New reporting requirements for superannuation pensions

With the new super rules beginning on 1 July 2017, your requirement to report information about your SMSF and the pensions it pays you and other fund members may be changing. This is driven by the introduction of the new $1.6 million transfer balance cap which limits the number of assets you can use to pay pensions from super with.

Currently, pensions only need to be reported once a year through the SMSF annual tax and regulatory return to the Australian Taxation Office (ATO).

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