SMSF – Important Super Update!

Peter Cramer

Last Wednesday evening Kerry Schultz, Matt Richardson and I presented our latest SMSF seminar to a full house at GTP.

As always, there is much to discuss in the world of SMSF’s!

One important change is the new penalty provisions that are starting on 1/7/14 that relate to how Trustees of SMSF’s handle their paperwork and comply with their various obligations.  The ATO will now have the power to impose fines for breaches of regulations- which will come directly out of the Trustees pockets!  These fines can’t be paid from the Superannuation Fund.

More than ever- Trustees need to talk to us first before doing anything that they might be unsure about. Failure to sign relevant documentation, failure to have lodgements done on time, extraction of money out of the SMSF early or without justification are some of the triggers that will result in fines- which are significant- from $850 up to $10,200!

On a positive front, the session covered off a number of important strategies which have the direct impact of increasing retirement wealth through reducing or eliminating tax on investments and fast tracking growth inside your SMSF.

Ways to transfer business assets into the SMSF and earn tax free income were covered as well as a focus on special rules that allow much more than the standard level of contributions to the Fund.   This area has wonderful potential to increase wealth and dramatically reduce tax- particularly where sale of business assets is contemplated.

We highlighted the advantages of holding listed shares paying fully franked dividends and the extra tax refunds that can be generated.

The purchase of property in a SMSF has always been a popular investment idea:- what is also becoming more popular is borrowing inside the SMSF to gear up a property purchase.  The session highlighted the rather complex structures required to do this correctly and the risks and benefits of doing so.

It is most important that the borrowing process is carefully planned out and a sound understanding of the rules and obligations and lender requirements is crucial!  Fail to get this right and you will be facing the new penalty provisions outlined above!

One of the additional items included in the evening was the outline of two recent Court Cases concerning the pay out of death benefits of a deceased member- and how there was a long and bitter legal fight over who was entitled to what and what rules were applicable.

The lessons learned here were- know the rules, get early specialised advice in all estate planning matters, carefully consider who will be in control of the SMSF when you are no longer- and take advice on the important steps required to ensure your wishes are carried out (amongst others).

SMSF advice is highly specialised and it is not something to be neglected!

Contact Matt, Kerry or myself for more information on the seminar or to catch up concerning your SMSF- or if in fact you are ready to start your new SMSF!

Starting your own SMSF and being in control of your investment destiny- a great way to move forward….and we are here to make sure it happens for you!

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