Self-Managed Super Fund (SMSF) Topics
Collectables and personal-use assets like artwork, antiques, jewellery, vehicles, boats and wine should be for retirement purposes and should not provide present-day benefits. These items cannot be leased to or used by any related party. They cannot be stored or displayed in a private residence of any related party. Storage decisions should be documented and recorded. They should also be insured in the fund’s name within seven days of purchase. There are penalties involved for breaking the rules, so make sure that your fund is compliant with the laws.
- Transition to retirement payments (TRIS)
A member should choose a payment scheme from the self-managed super fund. He or she should recognise that the nature of payment from the SMSF does not change for the purpose of the super regulatory law. The trustee needs to ensure that the self-managed super fund is compliant with the superannuation regulatory laws and income tax laws, even if a number of issues rise along with the complexity of transactions due to the given the special features of TRIS.
Trustees should be reminded that: relevant to a trustee’s compliance with the law, that only 10% TRIS payment is the annual limit. TRIS payment is not a lump sum for super regulatory law purposes, it also cannot be paid by an in-specie asset transfer. If TRIS payment is treated as a super lump sum for income tax purposes, it may affect the amount of self-managed super fund exempted current pension income; even if particular fund assets are segregated current pension assets. It can also affect which super-related tax offsets apply to the payment.
- Trustees should be informed
ATO regularly have free self-managed super fund webinars for their trustees. The webinar explains the roles and responsibilities of trustees. They also explain the rules for accepting contributions and managing the self-managed super fund investments and how or when can you access super benefits and how they are taxed.
These webinars can be accessed at home through your computer or mobile device and questions can be raised throughout the session. These live sessions recordings can also be accessed at a later time and are available online. Schedules can be accessed at SMSF webinars.
SMSF videos can also be found on the ATO’s website. There are about 27 videos that talks about a range of topics like investments, contributions, payments and administration. These videos simplify a range of topics about self-managed super fund and can help you learn.
- Non-arm’s length ‘limited recourse borrowing’ (LRBA)
Trustees need to show that the LRBA was entered into and maintained on terms consistent with an arm’s length deal. There should be evidence that show that LRBA replicate the terms of commercial loans available in the same circumstances. SMSFs should meet the ‘safe harbour’ terms where LRBAs are consistent with an arm’s length deal.
- Release of authority payments
Fairer taxation of excess concessional contributions or FTECC and refund on non-concessional contributions or RENCC.
FTECC release authority states that excess contributions paid to release authorities within 7 days of the authority letter issue date and returned complete to release authorities.
RENNC release authority says that excess contributions are to be paid to the members within 21 days of the authority letter issue date and returned complete to release authorities.
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Kingston Knight Audit are the Auditor Melbourne experts to contact when dealing with your trust account audit, SMSF Audit, financial statement audit, and internal audit requirements. Contact us today, Kingston & Knight Audit offers a free telephone consultation to establish how we can best help you achieve the assurance and compliance you require.