An Actuarial certificate is a statement provided by a qualified actuary to confirm the proportion of an self managed superannuation fund’s (SMSF) income that should be exempt from income tax. The tax treatment of a fund depends on whether it is in accumulation or pension phase, or a combination of both.
There will in all likelihood come a time when you will need to wind up your self-managed superannuation fund (SMSF).
It’s always a good idea to start by sitting down to read your trust deed, as it may contain vital information about winding up your fund. Remember, once a fund is wound up, it cannot be reactivated.
A Self Managed Super Fund (SMSF) can be a very powerful retirement savings vehicle. It’s good for long-term wealth accumulation and asset protection within a tax-effective structure.
There is plenty of scope, however, to lose your footing over some of the required (and numerous) compliance tasks. If mishandled, the potential pitfalls can work to outweigh the benefits of saving for retirement through your SMSF.
The Tax Office has recently warned about the practice known as “dividend stripping”. It has drawn attention to a previously issued taxpayer alert also warning against these arrangements.
Of particular concern is dividend stripping involving the transfer of private company shares to a self-managed superannuation fund (SMSF). The Tax Office says the typical target audience for these arrangements include SMSF members (most commonly those near retirement) who own shares in a private company with substantial accumulated profits already taxed in the company’s hands and at the company’s tax rate.
The Tax Office recently completed a review of SMSF annual returns where distributions from a discretionary trust had been reported. It says a similar review is planned for next financial year.
A discretionary trust is one in which the trustee has a discretion to determine the amount of trust income to distribute to each beneficiary.
While providing income for retirement is the obvious purpose of a pension paid from a self-managed superannuation fund (SMSF), there are some issues to think about before drawing a pension from your SMSF.
While it might be a tough topic to broach, it is inevitable that someday you will leave your business. You can’t know whether you’ll sell up, retire or leave due to health reasons, so is important that you prepare yourself for any eventuality.
Do you understand the differences between concessional and non-concessional SMSF contributions?
Making payments into your self-managed superannuation fund (SMSF) with pre-tax dollars is labelled making “concessional contributions”. These payments to your super fund include the compulsory 9.5% super guarantee paid by employers, salary sacrificed amounts and personal contributions for which you can claim a tax deduction (like those made by the self-employed).
Auditors play a crucial role in the compliance regime of self managed superannuation funds (SMSFs). The legislation that governs the SMSF sector requires that accounts, statements and all compliance needs of an SMSF be audited every year by an “approved auditor”*.
Many SMSF trustees contemplate investing in real property as part of the fund’s investment strategy. However, a Tax Office notification has raised concerns that some trustees may not fully consider the risks and issues associated with holding a real property investment and how this can affect other aspects of the fund, such as benefit payments.