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SMSF dividend stripping in the taxman’s firing line

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.

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Not all SMSF contributions are equal.

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).

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Auditors: An SMSF essential

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”*.

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SMSFs investing in property: Tips and traps

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.

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Federal Budget 2015: Superannuation

As promised, there were no new changes for superannuation. However, a number of measures affecting pensions were announced including: rebalancing asset test thresholds and ‘taper rates’; improving the integrity of social security income tests arrangements; a decision not to proceed with elements of the previously announced measure to maintain eligibility thresholds for Government payments; and a decision not to proceed with pension indexation to CPI.

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