SMSF

Challenging a discretionary decision of A Self Managed Superannuation Fund trustee in respect of the payment of a deceased member’s death benefits

Challenging a discretionary decision of A Self Managed Superannuation Fund trustee in respect of the payment of a deceased member’s death benefits

The case of Re Marsella; Marsella v Wareham [2018] VSC 312 (13 June 2018) concerned a claim by the widower of the willmaker for further provision from the estate of the deceased pursuant to Part IV of the Administration and Probate Act 1958. 

Sladen Snippet – Marsella – is this the end for SMSF trustee death benefit discretionary determinations?

Sladen Snippet – Marsella – is this the end for SMSF trustee death benefit discretionary determinations?

What is “better” for paying out death benefits in a self managed superannuation fund (SMSF) - a binding death benefit nomination (BDBN) or trustee discretion? As a result of a number of cases, where BDBNs were found to be defective, trustee discretion was becoming a favoured method for some advisors.

Sladen Snippet – public trading trust rules here to stay? - changes lapse in Parliament.

Sladen Snippet – public trading trust rules here to stay? - changes lapse in Parliament.

We have previously noted in our Snippets in September and December 2015 that, under the legislation to introduce the new managed investment trust rules, it was proposed that self managed superannuation fund(s) (SMSFs) (and other exempt entities that are entitled to a refund of excess imputation credits) be excluded from the 20% tracing rule for the public trading trust rules. This would have resulted, from 1 July 2016, in the public trading trust rules not applying to unit trusts merely because a SMSF held more than 20% of the units in the trust.

Sladen Snippet - ATO gives further guidance on how related party LRBA loans can be rectified by 30 June 2016

Sladen Snippet - ATO gives further guidance on how related party LRBA loans can be rectified by 30 June 2016

Practical Compliance Guidelines PCG 2016/5 Income tax - arm's length terms for Limited Recourse Borrowing Arrangements established by self managed superannuation funds (Guideline) sets out further guidance as to how existing non-commercial limited recourse borrowing arrangement (LRBA) loans from related parties to self managed superannuation funds (SMSFs) can be put on commercial terms by 30 June 2016. If such loans are on commercial terms by that date and with effect for the 2015/16 year then the ATO will accept that such loans are on commercial terms and that they will not trigger the application of the non-arm’s length income (NALI) rules. The ATO has said that it will not select an SMSF for a review purely on the basis that it had a loan on a non-commercial basis for previous years.

Sladen Snippet – Non-commercial LRBA loans must be rectified by 30 June 2016

Sladen Snippet – Non-commercial LRBA loans must be rectified by 30 June 2016

The Australian Taxation Office (ATO) has confirmed that it will not take active steps to review non-commercial limited recourse borrowing arrangement (LRBA) loans prior to 30 June 2016.

Self Managed Superannuation Fund (SMSF) trustees are being encouraged to rectify their non-commercial LRBA loans by putting them on arm’s length terms by 30 June 2016. If that occurs then the ATO has confirmed that it will not actively review such non-commercial LRBA loans in prior years. Although not expressly stated on the ATO’s website, the ATO has indicated that such rectification does not need to be retrospective.

SMSFs and Asset Protection

SMSFs and Asset Protection

When people think of self managed superannuation funds (SMSFs) they mostly think of a vehicle to provide retirement benefits and their concessional tax treatment. In contrast, the asset protection benefit provided by SMSFs is often not considered.

This topic was addressed by Sladen Legal’s Phil Broderick, who delivered a presentation on SMSFs and Asset Protection, as part of the Television Education Network’s 3rd Annual Asset Protection Conference, on 15 October 2015.

SMSFs and Real Estate Upon the Death of a Survivor

SMSFs and Real Estate Upon the Death of a Survivor

A typical Self Managed Superannuation Fund (SMSF), being the classic “mum and dad” SMSF, generally transitions pretty smoothly through the lifecycle of its members. This includes the accumulation of assets in the growth/accumulation stage and managing benefit payments through the pension stage. It also usually transitions smoothly on the death of the first with the ability to pay a death pension to the survivor.

However, there is one event that can create significant transition issues for SMSFs, being the death of the surviving spouse, particularly in instances where the fund holds lumpy assets such as real estate.

Sladen Snippet – SMSFs, unit trusts and the public trading trust rules – the end is nigh?

Sladen Snippet – SMSFs, unit trusts and the public trading trust rules – the end is nigh?

The draft legislation of the Government’s proposed new tax system for managed investment trusts proposes that super funds (and other exempt entities that are entitled to a refund of excess imputation credits) be excluded from the 20% tracing rule for the public trading trust rules.

Sladen Snippet - Another SMSF civil penalty case

Sladen Snippet - Another SMSF civil penalty case

The Federal Court has handed down another civil penalty decision for breaches by self managed superannuation fund (SMSF) trustees of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

In the case of the Deputy Commissioner of Taxation (Superannuation) v Ryan [2015] FCA 1037 the Federal Court fined the two trustees of an SMSF $20,000 each for breaching the sole purpose test, the prohibition against providing members with financial assistance, the in-house asset rules and the requirement to make investments on an arm’s length basis. This was as a result of the SMSF lending to the members over $200,000. Most of these loans were never paid back to the SMSF ultimately leaving the SMSF with about $6,000 in assets. In addition, the members were disqualified as trustees.

Transferring Real Estate In and Out of SMSFs

Transferring Real Estate In and Out of SMSFs

On 20 August 2015, Sladen Legal’s Phil Broderick delivered a presentation on Transferring Real Estate In and Out of SMSFs, as part of The Tax Institute’s National Superannuation Conference.

Phil’s presentation considered a number of issues in relation to the holding of real estate in SMSFs and the transfer of real estate in and out of SMSFs.

Stronger Super and SMSFs – ISSUE 4

Stronger Super and SMSFs – ISSUE 4

The former Government’s first effort at alleviating the harsh operation of the excess concessional contributions (ECCs) regime was firstly introduced with effect from 1 July 2011 (and operated for the 2011/12 and 2012/13 years). Those rules operated so that on the first occurrence of an individual having ECCs, provided such ECCs were $10,000 or less, the individual had a one off choice of having up to 85% of their ECCs refunded where that amount refunded was subject to marginal tax rates (subject to satisfying certain criteria). Given the restrictive nature of this measure, it was roundly criticised as being inadequate.

ASIC warns real estate industry about recommending property investment through SMSFs

ASIC warns real estate industry about recommending property investment through SMSFs

The Australian Securities and Investments Commission (ASIC) has released a warning to the real estate industry regarding recommending self-managed superannuation funds (SMSFs) as an investment vehicle to acquire real property.

Stronger Super and SMSFS – Part 3

Stronger Super and SMSFS – Part 3

Collectables, market value reporting, separation of assets, investment strategies and 30% tax on contributions

In our first two articles on stronger super and SMSFs we set out a time line of the various stronger super and other Government changes that have affected self managed superannuation funds (SMSFs) in the last few years. In this article we look at some of those changes that commenced in the 2011/12 and 2012/13 years in more detail.