The directly held property makes up approximately 19% of all SMSF assets, indicating that many SMSF trustees consider it’s an important and significant part of a diversified portfolio. There are numerous strategies and ways for property to form part of an SMSF’s investments and each must be carefully considered.
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The superannuation trust deed, along with the superannuation laws, form the governing rules that a self-managed super fund (SMSF) need to operate by. The introduction of the $1.6 million transfer balance cap (TBC) and new transition to retirement income stream (TRIS) rules are a ‘game changer’ for SMSFs when discussing benefit payments and estate planning. With the new super rules in effect as of 1 July 2017, now is the right time to review if your trust deed needs to be enhanced or amended to deal with the new approaches and strategies you may need to implement.
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:
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.
At Stellar Super we are passionate about helping our clients get the most from their Self-Managed Super Funds (SMSF’s) – what we deliver is confidence in the Super Advisory process.
We are offering an “audit only” service for financial providers who like to offer independent, third-party audits for their clients, as well as for SMSF Trustees that prepare their year-end work.
Our fee for this service will be a flat-rate, no matter the size of the SMSF, and you can be assured of privacy for your firm and your clients.
Our ASIC registered SMSF Auditors have extensive knowledge in this area and will be able to ensure a high quality and professional experience for your clients.
If you would like additional information about our services, please contact us at our office.
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).
We are offering a complimentary service for our clients called ViewSuper.
ViewSuper allows real-time two-way communication between us and you. It is an online portal that gives access to data for Trustees, including a snapshot of contributions received, withdrawals and any alerts to the Trustee of potential issues.
Trust deeds in the new SMSF world – Benefit payments and estate planning
The superannuation trust deed, along with the superannuation laws, form the governing rules that a self-managed super fund (SMSF) need to operate by. The introduction of the $1.6 million transfer balance cap (TBC) and new transition to retirement income stream (TRIS) rules are a ‘game changer’ for SMSFs when discussing benefit payments and estate planning. With the new super rules in effect as of 1 July 2017, now is the right time to review if your trust deed needs to be enhanced or amended to deal with the new approaches and strategies you may need to implement.
From 1 July 2017 a cap of $1.6m will be introduced on the amount a person can transfer into the tax free retirement phase. Anyone with a total retirement phase balance in excess of $1.6m will generally be required to either commute the excess amount back to accumulation phase or withdraw the excess from superannuation altogether. Further, transition to retirement (TRIS) pensions will not be treated as retirement phase income streams from 1 July 2017.
Overview
Earnings on assets supporting retirement phase income streams are eligible for an exemption from income tax. To compensate those who will need to transfer assets out of retirement phase in order to comply with the new rules will have access to Capital Gains Tax (CGT) relief on the impacted assets. This CGT relief will allow the Trustee to elect to reset an asset’s cost base in 2016-17. This effectively locks in the capital gains tax treatment of the assets up to 30 June 2017 prior to the new rules applying from 1 July 2017. How this relief applies is different depending on several factors.
Time to Review your Mortgages
According to Galaxy research, that iSelect arranged, one third of mortgagors have not reviewed their mortgage options in the last five years and over 80% of Australians do not know their mortgage rate.
If you could pay less in interest rates, grow your superannuation benefits faster or just pay less in fees is it not worth knowing about?
There is a misconception that moving lenders is costly and a hassling event, this is not always the case. The potential saving gains that can occur, when switching a loan to one with a lower interest rate, can sometimes be underestimated.
This year we will be encouraging our clients to do an annual home loan check, both outside of their SMSF and within for the Limited Recourse Borrowing Arrangement (LRBA’s) in place.
