All Self-managed super funds posts

Re: SMSF

ChrisR — Thu, 27 Feb 2020 05:35:22 GMT

Thanks for your post.

is correct if that is what you mean by your questions. If you are asking whether your SMSF can lend money to you so that you can purchase a property, there are restrictions on that.

You can't lend money or provide direct or indirect financial assistance from your fund to a member, or a member’s relative. For more information about that, have a look at the SMSF loans and early access page on our website.

Any super contributions that your employer pays for you need to be directed to your SMSF account. Your employer can't pay them to you directly. If you have legitimately lent money to your SMSF, your fund can use those contributions to repay you in accordance with the terms and conditions of the loan arrangement.

As has said, consider appointing professionals to help you with these types of investments.

Hope this helps.

Thanks,

ChrisR

Re: FHSSS - using funds

ChrisR — Thu, 27 Feb 2020 02:25:07 GMT

Thanks for your question.

After you have submitted your FHSS release request, it can take between 15 and 25 business for us to pay the balance of your released amount to you.

For more information about receiving your amount, have a look at the FHSS scheme page our website.

The fact that you appear to have a SMSF and have likely sent the requested amount to us as quickly as possible should theoretically speed up the process.

It is important to note that we also require time to withhold the appropriate tax and check for any outstanding Commonwealth debts that the amount needs to be offset against before we pay the remaining amount to you.

Hope this helps.

Thanks,

ChrisR

Re: Gold Bullions in SMSF

Bruce4Tax — Wed, 26 Feb 2020 04:43:36 GMT

With the valuations however at year end 30 June. Is a confirmation from the trustees sufficient if they confirm no changes in value from prior year financials?

The price of gold changes every day, so there will be a change in value.

Also is it okay for the trustees to store the bullions at their own personal home?

This would call into question whether the trustees are fulfilling their responsibilty to act prudently - the fund is exposed to loss if the the gold is stolen. Prudent trustees would hold their gold bullion with one of the companies that buy, sell and hold gold.

Then there is the issue of how the auditor can establish that the gold exists, and is properly valued. The auditor would have to inspect the gold on 30 June each year, if you can find one who is prepared to do that. There is no assurance that the gold is there on the day before and the day after.

SMSF member receiving warning about changes to their reocrds

matthewk — Wed, 26 Feb 2020 03:45:59 GMT

Our SMSF clients have started receiving the following message that provides so little information but has caused alarm for the clients. As a result they call us worried or angry that we or somebody has been making changes to their SMSF without their permission. The email message doesn't tell the SMSF member what has changed or what form has triggered the change. We now have to spend time guessing which of the following might have changed and then report back to the SMSF.

* financial institution account details
* electronic service address (ESA)
* authorised contact
* members.

So far all we can determine is the tax return has been lodged with bank details (not changed) and members balances (not new memebrs).

Why can't the ATO be more informative in their warning messages. They know exactly why they triggered the message. The populated the client name & SMSF details. Why not the reason?

Gold Bullions in SMSF

Jen1 — Wed, 26 Feb 2020 01:55:10 GMT

Hey everyone,

I am just wondering, if a member of the fund invests in gold bullion, as it doesn't fall under the collectables rules, it does not need to be insured. With the valuations however at year end 30 June. Is a confirmation from the trustees sufficient if they confirm no changes in value from prior year financials? Also is it okay for the trustees to store the bullions at their own personal home?

Re: SMSF

Bruce4Tax — Tue, 25 Feb 2020 01:47:02 GMT

Can I lend my SMSF money to enable me to purchase a property?

Do you mean "Can I lend my SMSF money to enable the SMSF to purchase a property? "

If so, then Yes, in theory - but harder in practice because the SMSF needs to comply with the LRBA rules.

https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/SMSF-technical/Limited-recourse-borrowing-arrangements---questions-and-answers/

Can my employer pay me my super contributions to repay that loan?

In theory, Yes - but there caps for concessional contributions. Also, employers do not always want to do salary sacrifice contributions.

For anything to do with LRBA arrangements, you need to get specialist advice before trying to do it yourself.

SMSF

Janfra — Tue, 25 Feb 2020 01:12:23 GMT

Can I lend my SMSF money to enable me to purchase a property? Can my employer pay me my super contributions to repay that loan?

Re: Listed shares as contributions

Bruce4Tax — Tue, 25 Feb 2020 00:25:02 GMT

Have listed shares outside of smsf on ASX value circa $100k with significant cgt payable if sold but have held for longer than 12mths.

If you transfer in the shares as an in specie contribution, then you can claim a deduction of up to $ 25,000 - depending on whether you have any other concessional contributions. But, only a benefit if it will reduce personal tax by more than the the 15% contributions tax payable by the fund.

Would need to know the exact numbers to be any more specific.

Listed shares as contributions

Gmcg — Tue, 25 Feb 2020 00:04:55 GMT

Hello

Just looking for some guidance...

Age 60 and not retired (self employed- low income) with a smsf balance circa $600k.

Have listed shares outside of smsf on ASX value circa $100k with significant cgt payable if sold but have held for longer than 12mths.

I'm looking to transfer said shares directly into smsf (if possible) and to obviously minimise tax payable in the process.

Looking for options here if anyone can help.

With thanks

Graeme

FHSSS - using funds

jesswa — Mon, 24 Feb 2020 07:52:18 GMT

I have requested a release, sent the funds to the ATO and express posted my form back to ATO to conform.

How long until I can expect the funds in my account?

Re: SMSF Investment Strategy update ruling

Bruce4Tax — Sun, 23 Feb 2020 22:42:19 GMT

Updated guidelines https://www.ato.gov.au/super/self-managed-super-funds/investing/your-investment-strategy/

SMSF Investment Strategy update ruling

DJP — Sun, 23 Feb 2020 22:32:29 GMT

Was there a new ruling issued about investment startegy recently or just revised guidelines issued recently.

Re: Treatment of Income Protection payouts in superfund and allocation urgent

Bruce4Tax — Wed, 19 Feb 2020 22:25:08 GMT

I quickly need your help. member of our Superfund received insurance benefits under the income protection claim and need to be allocated under right head. I believe it would be taxable right at 15% in the super fund.

According to First State Super:

Income protection insurance held on a member's behalf through super is not assessable income of the fund, and the fund trustee cannot claim a tax deduction for proceeds paid on to a member.

The SMSF needs to issue a payment summary, because benefits are taxable to member as ordinary income.

can we make one lump sum payment? .

No - see https://www.ato.gov.au/Super/Self-managed-super-funds/Paying-benefits/Conditions-of-release/#Temporaryincapacity

Treatment of Income Protection payouts in superfund and allocation urgent

Lbhardwaj — Wed, 19 Feb 2020 06:44:50 GMT

Hi There,

I quickly need your help. member of our Superfund received insurance benefits under the income protection claim and need to be allocated under right head.

I believe it would be taxable right at 15% in the super fund.

And also, can you please also describe how the payment will be processed to member under the temporary incapacity, can we make one lump sum payment? .

Please assist asap.

Re: Transfer funds SMSF to Industry Fund

Bruce4Tax — Tue, 18 Feb 2020 23:27:52 GMT

My wife’s equity in our SMSF is substantially more that the amount she wishes to transfer out of the SMSF into her industry fund.
My wife is 64 and I am 69. Are there any potential problems with doing this and what process is involved?

If your wife's SMSF member account was, say, $ 500,000 and she transferred $ 200,000 to an industry fund, then her member account in the SMSF would be reduced to $ 300,000.

The process is:

1. prepare SMSF financials up to date - to ensure tax components are correct.

2. issue a lump sum prepayment statement to member for amount to rollover

3. member responds with name and details of industry fund - fill in on form and sign

4. member sends completed rollover form to industry fund

5. EFT amount to industry fund, or cheque

6. fund should get confirmation that rollover was accepted by industry fund - for SMSF auditor.

7. If there is any commutation of pensions, then TBAR form needed.

We would like to transfer most of the cash amount into my wife’s industry fund account.

Need to ensure that SMSF liquidity is maintained.

Transfer funds SMSF to Industry Fund

HEE — Tue, 18 Feb 2020 02:08:52 GMT

My wife and I are the sole members of our SMSF.
My wife also has some superannuation in a pre-existing Industry Super Fund account.
We have substantial cash in a SMSF term deposit which is underperforming.
We would like to transfer most of the cash amount into my wife’s industry fund account.
My wife’s equity in our SMSF is substantially more that the amount she wishes to transfer out of the SMSF into her industry fund.
My wife is 64 and I am 69.
Are there any potential problems with doing this and what process is involved?

Re: Can I invest funds (part only) from my SMSF . into an industry super fund ?

Bruce4Tax — Mon, 17 Feb 2020 21:50:29 GMT

and put the combined amount into an industry super fund. Is this possible?

This sounds like taking all the assets of one fund and investing it all in another fund. It is possible, to the extent that there is at least one industry fund that issues investments that can be owned a a SMSF.

Is this a good move.?

Most would ask why have the SMSF at all if all the assets were invested in an industry fund.

If you are uncertain as to whether it is a good idea, then you need to get advice from someone holding a financial services license.

You should check out the industry fund's policy on distributing investment returns to members, because you may find that the fund uses reserves to smooth out annual returns to members. This is very different to how your SMSF dealt with investment returns.

Can I invest funds (part only) from my SMSF . into an industry super fund ?

Ajhcaldwell — Mon, 17 Feb 2020 06:33:17 GMT

I wish to keep control of my self managed super fund as I have a good share portfloio, a rental property, and additional funds.

The cash and small property fund are returning less than 2%.

I woild like to sell the investment property, and small property fund, combine the return and cash, which would be sizable.

and put the combined amount into an industry super fund.

Is this possible?

Is this a good move.?

I'm over 65 years old and looking for a steady income stream.

Tony C

Re: SMSF Valuation of Foreign Investments

MD1 — Sat, 15 Feb 2020 00:39:34 GMT

Thanks Bruce4Tax,

I'd rather not override BGL as that would be time consuming. So best then that I stick tothe RBA rates when working out the market value of investments as all other foreign transactions have used the RBA rate.

I would assume 'You can also use rates published by another reliable external source' would include the RBA.

Thanks

Re: SMSF Valuation of Foreign Investments

Bruce4Tax — Mon, 17 Feb 2020 01:38:17 GMT

This sounds like you are using BGL. If so, then you can over-ride the RBA rates and use ATO rates.

The rationale provided by BGL is shown below - see help file

For example

30/06/2019	RBA rate (USD -100.00 / 0.7013)	25000/CBA123456 - new		142.59
	30/06/2019	ATO rate (USD -100.00 / 0.7332)	85000 - Income Tax Payable/Refundable		136.39

Which ever way you go, apply methods consistently.

BGL has opted to use the official end of day exchange rates from the RBA instead of those provided by the ATO.

This is due to the ATO not providing daily rates, not providing timely data, not providing daily rates older than 2 years and not providing data which is easily machine-readable. You will have the ability to overwrite the conversion rate

Alternatively, average rates are published to the Tax Office website. Here you can find lists of exchange rates for selected countries including average monthly and yearly rates. Alternatively, you can use appropriate exchange rates provided by a banking institution operating in Australia including, where relevant, the banking institution through which your foreign income is received. You can also use rates published by another reliable external source. The rate used and the source of rates should be kept with your records. The Reserve Bank of Australia (RBA) provides official exchange rates on its Website.

SMSF Valuation of Foreign Investments

MD1 — Fri, 14 Feb 2020 14:11:42 GMT

Hello,

Our SMSF system calculates foreign transactions based on the RBA rates not the ATO exchange rates.

My question is whether it is ok to use the RBA rate rather than the ATO rate when valuing the investments as at 30 June. I notice the RBA rate for USD as at 30 June 2019 is 0.7013 whereas ATO have 0.7332. This can make quite a difference with high valued investments. Which in turn makes a difference for the Total Super Balance and the minimum pension.

MD1

Re: SMSF Purchase of Units in a Non Geared Unit Trust

ChrisR — Fri, 14 Feb 2020 04:03:17 GMT

Thanks for your questions.

There don't appear to be any obvious issues with your scenario. If you would like to do some reading, we suggest that you check out the in-house assets page on our website.

If you would like us to take a closer look at your SMSF's investment proposal, we recommend that you submit a request for self-managed superannuation fund specific advice or speak with a SMSF professional.

Hope this helps.

Thanks,

ChrisR

Re: Payment slips

ChrisR — Wed, 12 Feb 2020 02:03:29 GMT

Thanks for your question.

You can download payment options slips for your clients from our new Online services for agents. All you need to do is select the Payment options link for the relevant account. From the resulting Payment options page, select the Print-friendly version.

For more information on how to access the Payment options link, check out the Payment options section of the Online services for agents user guide on our website.

Payment slips are available for the following tax types:

income tax (individual, company and superannuation)
activity statements (TFN and ABN)
superannuation (self-managed super fund receipts and superannuation surcharge receipts)
fringe benefits tax (FBT).

If there has never been a tax return, activity statement, FBT or superannuation form lodged, the payment slips will not appear in Online services for agents. Payment slips are available for accounts with nil balances provided there are postings on the account.

Hope this helps.

Thanks,

ChrisR

Re: rollover from SMSF to industry fund

ChrisR — Tue, 11 Feb 2020 08:08:26 GMT

Thanks for your question.

All of the information provided by is correct.

For more information about your SMSF's rollover requirements, refer to the rollovers page on our website.

Hope this helps.

Thanks,

ChrisR

Re: Releasing FHSS and deductions

ChrisR — Tue, 11 Feb 2020 07:22:52 GMT

Thanks for your reply.

Based on the information from your previous posts, it isn't surprising that the FHSS maximum release amount is less than $30,000. This is because the amount includes:

100% of eligible non-concessional contributions
85% of eligible concessional contributions
associated earnings calculated on these contributions

Assuming that your total personal voluntary contributions were $30,000 and your total tax deductions were $28,000, the outcome of your FHSS determination request might have looked something like this:

Concessional contributions: $23,800 (85% of $28,000)
Non-concessional contributions: $2,000 (personal voluntary contributions not claimed as a deduction)
Total associated earnings: $840
Maximum release amount: $26,640

Hope this helps.

Thanks,

ChrisR

Re: SMSF Purchase of Units in a Non Geared Unit Trust

Harleyboy — Tue, 11 Feb 2020 05:20:37 GMT

Hi Team, in a similar vein to this question, is there any limitations for a SMSF to acquire units in a NGUT that have have the folowing features:

A property (an existing residential house on land) with nil charges / debts on title.
The unit holders of the NGUT are related parties to the SMSF.

Q1. Could the SMSF acquire >5%, for example 30% of the NGUT's units?

Q2. Could the NGUT replace the existing house with a new house?

Q3. Is there any limitations on the land held in the NGUT splitting from 1 title to 2?

Thankyou, Harleyboy

Re: Making contributions aged 74 and work test

Bruce4Tax — Mon, 10 Feb 2020 07:36:36 GMT

She satisfies the work test very easily.

You have to be really careful with terminology. The work test means working 40 hours within a 30 day continous period before a contribution can be made.

We mistakenly thought that if she aleady had more than $300,000 in her SMSF component that further contributions could not be made.

That is not the work test - that is the new special exemption to the work test in the first year that some-one over 65 fails to meet the work test.

Her income is already well under the tax threshold. She does satisfy the work test.

You did not mention her income level originally, so covering all possibilities. Then there is no point in making concessional contributions (CC) because the SMSF would have to pay 15 % contributions tax. Best to get expert advice, from someone who has all your particular circumstances, before acting.

Re: Making contributions aged 74 and work test

Super_Song99 — Mon, 10 Feb 2020 03:39:18 GMT

Sorry, but I don't understand the answer to the first question regarding my wife's contribution to SMSF. It appears that "Yes" she can make the $100,000 contribution (from the sale of a privately owned property) even though she has about $475,000 already in her component of our SMSF. We mistakenly thought that if she aleady had more than $300,000 in her SMSF component that further contributions could not be made.

But what does it mean to say..."and also concessional up to her 2020 CC cap if a tax deduction is needed." What is a 2020 CC cap? She has not contributed into her SMSF for many years, and at age 73 she is well into pension mode. I don't think a tax deduction is needed or is being sought. Her income is already well under the tax threshold. She does satisfy the work test.

Re: Making contributions aged 74 and work test

Bruce4Tax — Sun, 09 Feb 2020 22:47:35 GMT

She satisfies the work test very easily. Can she make this contribution or is there a limit to prevent it?

Yes, and also concessional up to her 2020 CC cap if a tax deduction is needed.

Can I make another $100,000 contribution in the next financial year (July) before I turn 75 years in August?

Yes, as long as you can pass the work test before the contribution. The work test exemption would only be available if your super balance was under $ 300 K.

Making contributions aged 74 and work test

Super_Song99 — Sat, 08 Feb 2020 23:11:35 GMT

(1) My wife is 73 years and she would like to contribute $100,000 (from a property sale) to her fund. But her fund already has $475,000. She satisfies the work test very easily. Can she make this contribution or is there a limit to prevent it?

(2) In my case I am 74 years and made a $100,000 contribution to our SMSF in December, 2019. Again the work test is OK. Can I make another $100,000 contribution in the next financial year (July) before I turn 75 years in August?

Re: rollover from SMSF to industry fund

Bruce4Tax — Sat, 08 Feb 2020 04:11:20 GMT

Can this be done bit-by-bit as existing Term Deposits in the SMSF mature?

Yes - each transfer is a rollover to your new fund.

In the SMSF we have separate contributions. Does this mean that we each need to open separate new Industry Funds, and if so, how do we determine how much goes into each new fund?

Just as you have separate member accounts in the SMSF, each person will have a separate account in the new fund.

how do we determine how much goes into each new fund?

Your SMSf should prepare financial statements up to date before each rollover - this will provide the correct amounts for the rollover forms.

rollover from SMSF to industry fund

Super_Song99 — Sat, 08 Feb 2020 01:42:30 GMT

My wife and I have a SMSF and we wish to transfer (rollover) to an Industry Fund. Can this be done bit-by-bit as existing Term Deposits in the SMSF mature? Or must it all be done at once?

In the SMSF we have separate contributions. Does this mean that we each need to open separate new Industry Funds, and if so, how do we determine how much goes into each new fund?

Re: Releasing FHSS and deductions

jesswa — Fri, 07 Feb 2020 09:00:05 GMT

thanks for that info. I went ahead and requested the release.

It will only return $26,640.00 back to me. Do you know why is it not the full $30,000?

Thanks again

Re: Releasing FHSS and deductions

ChrisR — Fri, 07 Feb 2020 08:22:03 GMT

Thanks for your question.

When you are ready to withdraw your voluntary super contributions under the FHSS scheme, you will need to submit a FHSS determination request followed by a FHSS release request.

For more information about the FHSS scheme and applying to release your savings, have a look at our website.

When you complete the FHSS determination request, you will be asked to detail every voluntary contribution you made by providing the date, voluntary contribution type (personal after-tax or salary sacrifice) and amount. If you made 15 contributions over the three years, you will need to detail 15 separate contributions.

You will then be asked to provide a total deduction amount for each applicable financial year. These can be deductions that you have already claimed or intend to claim.

Assuming that you have claimed or will be claiming deductions for all three financial years, you will need to provide three separate deduction amounts. You will be asked to provide the financial year and the total amount for each financial year.

If you complete the FHSS determination request online, the system is designed to ensure that you don't enter a deduction amount that is more than the total of the contributions for the applicable financial year.

Based on the information that you provide, we will then work out the following amounts:

Concessional contributions
Non-concessional contributions
Total associated earnings
Estimated maximum withholding tax, and
Maximum release amount

Hope this helps.

Thanks,

ChrisR

Re: Payment slips

GTbusiness — Fri, 07 Feb 2020 05:50:19 GMT

Hi , the link in your reply goes to an old January 2018 web page that references the BAS Agents Portal, which Im sure you are aware is now switched off. mentions the New portal in her question. Your reply does not answer it.

Is it possible to print a payment slip from the new Online Services site?

Thanks

Re: Self managed super fund

Bruce4Tax — Wed, 05 Feb 2020 00:11:08 GMT

Yes, if you can satisfy the LRBA rules:

https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/SMSF-technical/Limited-recourse-borrowing-arrangements---questions-and-answers/

Re: Self managed super fund

Carlo — Tue, 04 Feb 2020 23:17:05 GMT

Thanks Bruce! In addition is my SMSF allowed to take out a loan to buy the property given it has the applicable deposit and meets the payment schedule?

Re: Releasing FHSS and deductions

jesswa — Tue, 04 Feb 2020 08:45:58 GMT

I know I can request the full $28,000. I don’t understand what the deduction question means?

Is it asking what $ amount I claimed the payments on my personal tax? Or? If it is, do I write in the full amount of the $28,000?

Re: Releasing FHSS and deductions

Bruce4Tax — Mon, 03 Feb 2020 22:17:09 GMT

I have put in $28,000 non-concessional voluntary payments (after tax / from salary) over three years and would like to request a release. I have claimed the deductions / will be claiming this year as a tax deduction on my personal tax.

When going through the release process, what do I write in the deductions section? $28,000?

From ATO:

The FHSS maximum release amount is the sum of your eligible contributions, taking into account the yearly and total limits, and associated earnings. This amount includes:

100% of eligible non-concessional contributions
85% of eligible concessional contributions
associated earnings calculated on these contributions using a deemed rate of return – this is based on the 90-day Bank Bill rate plus three percentage points (shortfall interest charge rate).

The FHSS maximum release amount takes into account the $15,000 limit from any one year and $30,000 total limit to the total contributions across all years when calculating the eligible contributions, before adding the associated earnings.

https://www.ato.gov.au/Individuals/Super/Withdrawing-and-using-your-super/First-Home-Super-Saver-Scheme/

Best to ask your fund what your FHSS amount is.

Releasing FHSS and deductions

jesswa — Mon, 03 Feb 2020 06:35:43 GMT

When going through the release process, what do I write in the deductions section? $28,000?

Re: Reporting SMSF personal CC contributions in Tax Return

Bruce4Tax — Sun, 02 Feb 2020 22:02:59 GMT

Lodging personal return will fix the problem.

Re: Reporting SMSF personal CC contributions in Tax Return

vgleiber — Sun, 02 Feb 2020 21:09:41 GMT

OK, guys, thanks

It looks like I possibly got it.

There're 2 almost independent docs: SMSF & Personal returns.

But ATO combines info from both of them to get to correct bring-forward NCC, e.g. 175000 from SMSF minus 24400 from Personal.

The problem is that our personal returns are still with our Agent, so I'll wait till they are submitted and then return to this issue.

Thsnks again for your help

Re: Pension Commutation on 1 July

Lionel11 — Fri, 31 Jan 2020 07:12:45 GMT

Thanks Bruce

Re: Pension Commutation on 1 July

Bruce4Tax — Fri, 31 Jan 2020 06:23:37 GMT

My understanding is that the fund needs to make a minimum pension payment of 1/365 of annual amount on this day and prior to making commutation. Is this correct?

If you commute on 01 July, there is no minimum pension to be paid, and no actuary report needed for 2020-21.

When we wind up SMSF with a pension, we keep then pension going right up to the point of windup. If the fund is 100% pension now, there is no reason why it cannot continue as 100% pension right up to the end. As long as the minimum cash pension is paid at some time during the final year, other benefits can be in specie or rollovers if that is your intention.

There is ATO checklist for winding up

https://www.ato.gov.au/super/self-managed-super-funds/in-detail/smsf-resources/smsf-checklists/#WindingupanSMSF

Pension Commutation on 1 July

Lionel11 — Fri, 31 Jan 2020 05:42:12 GMT

I am planning to close our SMSF which is currently in full pension mode. I do all the accounting myself and have the fund audited.

I plan to Commute pensions to Accumulation phase on 1st July 2020 and close the fund during the 20/21 tax year by paying a superannuation lump sum.

My understanding is that the fund needs to make a minimum pension payment of 1/365 of annual amount on this day and prior to making commutation. Is this correct?

The fund would be in Pension phase only for a few hours on the 1st. So for the 20/21 tax year the fund would have 0 days in pension phase and all days in accumulation phase. This would mean there would be no Exempt Current Pension Income and there would not be a requirement for an Actuary Certificate. Is this correct?

Re: Reporting SMSF personal CC contributions in Tax Return

Bruce4Tax — Fri, 31 Jan 2020 02:22:51 GMT

Still not clear

I'm not worried about CC - I agree that it'll come from individual tax return.

I'm worried about bring forward NCC.

Claiming CC in personal tax return tells ATO that part of the $ 175 K is CC.

Maybe ATO super section has not matched it ll up yet.

Your example of 16K in both R2 & B is exactly what iCare did including 24,400 in both without any indication that 24,400 of B isn't NCC.

Because that is how SMSF tax returns are done, so do not try to amend it.

If you want to ask ATO directly, ring 13 10 20 and say the $ 175 K has not been reduced by $ 24,400.

Your wife should be present in case she needs to authorise you to speak about her super.

Re: Reporting SMSF personal CC contributions in Tax Return

Bruce4Tax — Fri, 31 Jan 2020 02:12:40 GMT

I don't claim anything back.

But you said: "My wife made a personal NCC contribution to our fund of $175,000 and later claimed $24,400 of it as CC."

Are you suggesting to enter $150,600 in Label B instead of $175,000?

No, $ 175 K is correct - member CC is picked up from the personal return where the deduction is claimed, not SMSF tax return.

Re: Reporting SMSF personal CC contributions in Tax Return

vgleiber — Fri, 31 Jan 2020 01:58:06 GMT

Still not clear

I'm not worried about CC - I agree that it'll come from individual tax return.

I'm worried about bring forward NCC.

Your example of 16K in both R2 & B is exactly what iCare did including 24,400 in both without any indication that 24,400 of B isn't NCC.

Re: Reporting SMSF personal CC contributions in Tax Return

Bruce4Tax — Fri, 31 Jan 2020 01:47:54 GMT

no label to report it as CC and the whole $175,000 was reported in Label B (Personal contributions).

That is correct.

As a result, on ATO site the whole $175,000 is reported as a bring forward NCC instead of $150,600.

That should not happen - member CC is detected from the personal tax return, not the SMSF return.

For example, very similar situation for $ 16 K member CC - online services shows correctly

Financial year 2018-19

Concessional contributionsAmountConcessional contribution cap Contributions counting towards your client's cap

$25,000.00
$16,000.00
Unused concessional contributions cap Tooltip If the total super balance on 30 June 2019 is less than $500,000, the 2019-20 contributions cap will be increased by this amount	$9,000.00

and $ 16 K was shown at Section B Label R2 and Section F label B - as it should be.

How to resolve?

1. make sure personal tax return correctly assessed, and if so

2. have your accountant deal with it by contacting ATO.

Re: Reporting SMSF personal CC contributions in Tax Return

vgleiber — Fri, 31 Jan 2020 01:46:42 GMT

Sorry, unclear

I don't claim anything back.

And my accountant (iCareSuper) understands the problem but doesn't know what to do.

Are you suggesting to enter $150,600 in Label B instead of $175,000?

Re: Reporting SMSF personal CC contributions in Tax Return

macfanboy — Fri, 31 Jan 2020 01:35:39 GMT

Go and see your accountant and get an amendment ASAP.

You only report the amount that you are claiming back, not the total amount.

Reporting SMSF personal CC contributions in Tax Return

vgleiber — Thu, 30 Jan 2020 23:53:05 GMT

My wife made a personal NCC contribution to our fund of $175,000 and later claimed $24,400 of it as CC.

Tax return created by our accountants correctly reported this figure in Section B (Income), Label R2 (Assesable personal contributions).

But in Section F (Member infotmation) for her there was no label to report it as CC and the whole $175,000 was reported in Label B (Personal contributions).

As a result, on ATO site the whole $175,000 is reported as a bring forward NCC instead of $150,600.

How to resolve?

Re: Can SMSF Claim Input GST Credit on Collectables

Bruce4Tax — Thu, 30 Jan 2020 22:30:14 GMT

The SMSF is GST registered. Can SMSF claim Input GST credit on collectables items.

As a general rule, not limited to SMSF, only if the buyer is conducting a business of trading in collectibles or there is some kind of profit-making scheme.

The SMSF is required to treat any gain/loss on sale of investments as capital gains/losses, so collectbles should be treated as investments - not trading stock. This means no GST credits claimed.

Can SMSF Claim Input GST Credit on Collectables

manishk1 — Thu, 30 Jan 2020 09:37:07 GMT

Hi,

An smsf made investment in collectables item and paid gst on it. The SMSF is GST registered. Can SMSF claim Input GST credit on collectables items.

Re: Cash in SMSF

Bruce4Tax — Thu, 30 Jan 2020 01:10:46 GMT

First thing to do is ask the fund auditor - and see what sort of answer you get!

Re: Non Concessional contributions

MikeGG — Wed, 29 Jan 2020 10:02:55 GMT

Thanks macfanboy.

Very helpful.

Mike

Re: Non Concessional contributions

macfanboy — Wed, 29 Jan 2020 05:55:45 GMT

It all seems correct however as of July 1, 2020, the work test no longer applies for people 65 or 66:

https://www.taxandsuperaustralia.com.au/TSA/Resources/Federal-Budget-2019-20/Superannuation/TSA/Federal-Budget/2019-20/Superannuation.aspx?hkey=aaf6fb8e-4e60-4e75-aaae-eb8455394f01

Non Concessional contributions

MikeGG — Wed, 29 Jan 2020 04:05:06 GMT

I am 64 years of age, turning 65 on 12th February. It is my intention to make non-concessional contributions totalling $300,000 between 20 January and February 8th this year into my Accumulation A/C.

I understand that this will trigger the 'bring forward rule' given the contributions will be in excess of $100 000. As I understand it, as I was 64 at the commencement of the financial year, and all contributions are made prior to my 65th birthday, I do don't have to satisfy a work test, not even for the next two years given the contributions are all made prior to 12th February, my 65th birthday.

These planned contributions, combined with my capital amounts as at 1st July 2017 (accumulation account balance, pension account balance and defined benefit scheme special value) add up to well less than the $1.6m - Transfer Balance Cap.

(member 2) is 64 years of age, turning 65 on 27th March. Between August and September 2018, she made non-concessional contributions of $200 000 into her Accumulation Account. This activated the 'bring forward rule', limiting her to another $100 000 over the 3 year period.

her 65th birthday is March 27th this year. It is our intention to contribute another $100 000 into her accumulation account prior to her 65th birthday. I assume that she will not have to satisfy a work test given she was 64 at the start of the financial year and the contribution will be made prior to her 65th birthday. Once again she will not be anywhere near breaching her TBC.

Does all the above reflect the current rules to avoid making excess contributions?

Cash in SMSF

RT — Wed, 29 Jan 2020 00:57:12 GMT

Hi, can you please tell me if there's any reason a SMSF can't hold cash as an investment? That is, physical Australian dollars (not collectible coins) stored at a trustee's private residence? The trustees would sign a statutory declaration to confirm the cash is held separately from privately held cash.

Re: LumpSum payments over 60

NateH — Wed, 29 Jan 2020 00:23:30 GMT

Hi ,

is correct. Since you are over 60 and if the payout didn't include any untaxed components then it would not be counted as income and would be tax free.

Thanks, NateH

Re: Self managed super fund

Bruce4Tax — Tue, 28 Jan 2020 00:28:58 GMT

purchase a business such as a pub or restaurant and just lease out the premises as an investment?

The SMSF can certainly buy the property that the business is operating from, and then rent the property to the business operator on an arm's length basis.

That is not actually "buying the business."

Self managed super fund

Carlo — Mon, 27 Jan 2020 22:49:30 GMT

Hi, Just wondering if I’m able to purchase a business such as a pub or restaurant and just lease out the premises as an investment?

Re: Super - lost track but I have no tax file number too

macfanboy — Mon, 27 Jan 2020 08:25:04 GMT

Strange that they were able to identify you without a Tax file number.....

Try searching here also

https://www.moneysmart.gov.au/tools-and-resources/find-unclaimed-money

Re: First Year NCC Caps & Exceeding $1.6M TSB

Tomo — Mon, 27 Jan 2020 03:25:12 GMT

Bruce

Thank you heaps for your detailed response, it fully explains my concerns.

Thanks again

Re: First Year NCC Caps & Exceeding $1.6M TSB

Bruce4Tax — Mon, 27 Jan 2020 03:14:11 GMT

TSB becomes $1.69M after adding the first year NCC?

Could be more, could be less at any point in time e.g.

TSB 30/06/2019 1.39 M

+ net earnings to 15/02/2020 .06 M

Now TSB 1.45 M

+ NCC 15/02/2020 .30 M = $ 300,000 based on TSB 30/06/2019

Now TSB 15/02/2020 1.75 M

+ net earnings to 30/06/2020 .05 M

Now TSB 30/06/2020 1.80 M so no NCC allowed for 2020/21 because TSB 30/06/2020 is over 1.6 M,

as well as because NCC 3 year cap all used up.

NCC eligilty tested against TSB at the start of each year, not on what haapends in between.

So, if only 250 K NCC on 15/02/2020 then TSB 30/06/2020 is, say, 1.75 M.

Result is that no NCC allowed, even though 3 year cap not fully used.

Super - lost track but I have no tax file number too

waiinleong — Sun, 26 Jan 2020 23:40:19 GMT

Hi eveyrone,

I need some help. I received a letter from oversea to remind me I have unclaimed Super.

I tried to follow the letter to link myGov to Ato but apparently I cant' do that because I have no tax file number. I am struck and I do not know what to do and I can't contact them directly by email( can't find it ) and I have zone differences in oversea which is not easy to just do phone contact. I would love to find out my lost super , where are they and the history of it too.

Please give me advices... Thank you

Re: First Year NCC Caps & Exceeding $1.6M TSB

Tomo — Sun, 26 Jan 2020 04:45:04 GMT

Thank you Bruce, if I understand this correctly one could possibly be in a position with a SMSF account TSB of $1.39 with NCC $300K added and the TSB becomes $1.69M after adding the first year NCC?

Re: First Year NCC Caps & Exceeding $1.6M TSB

Bruce4Tax — Sat, 25 Jan 2020 23:16:58 GMT

Can I make one first year NCC contribution up to the value of the cap which may then cause the the total of [NCC] + [TSB @ 30 June prior F'yr ] > $1.6M .

Total superannuation balance on 30 June 2019	Maximum non-concessional contributions cap for the first year	Bring-forward period
Less than $1.4 million	$300,000	3 years
$1.4 million to less than $1.5 million	$200,000	2 years
$1.5 million to less than $1.6 million	$100,000	No bring-forward period, general non-concessional contributions cap applies
$1.6 million	nil	na

First Year NCC Caps & Exceeding $1.6M TSB

Tomo — Sat, 25 Jan 2020 10:16:18 GMT

I am retired over 60 but not 65, Can I make one first year NCC contribution up to the value of the cap which may then cause the the total of [NCC] + [TSB @ 30 June prior F'yr ] > $1.6M . eg. the TSB $1.39M and make a $300K NCC (using the 3 year cap). Noting that the TBA will remain < $1.6M.

(I appreciate that any portion of the cap not used in the first year cannot be used in subsequent years if it is to cause the TSB & the NCC to be valued greater than $1.6M.)

Re: How to account a Joining Bonus offer for an Investment

Bruce4Tax — Fri, 24 Jan 2020 22:00:57 GMT

say my investment was $170,000, eligible for a bonus of $3,400 and Stamp duty paid was $169. My opening statement shows $173,231.

If it is a unitised security, and you have effectively paid $ 170,000 for units with a fair value of $ 173,231, then your cost base for those units is $ 170,000 and the $ 3,231 is an unrealised gain.

Best to confirm your position with the product supplier.

Re: LumpSum payments over 60

macfanboy — Fri, 24 Jan 2020 08:26:21 GMT

No problems, I am a Tax professional and there are 1000's of questions that we don't readily know the answer to.

But we do know how to generally find the answers to them.

Some are not that straight forward and need a little experience to the best answer them as best as we can.

By all means, wait for one of the moderators to 'chip in', if they decide to...

Re: LumpSum payments over 60

Tomo — Fri, 24 Jan 2020 07:48:06 GMT

Thank you macfanboy, this is what I too expect, but hoping to have a tax professional chip in. Appologies to you if I have not recognised your qualification.

Thanks again

Re: LumpSum payments over 60

macfanboy — Fri, 24 Jan 2020 07:31:49 GMT

It shouldn't count as it is not taxable income.

Re: LumpSum payments over 60

Tomo — Fri, 24 Jan 2020 07:07:22 GMT

MACFanboy

Thanks for you feedback, I suppose I just didnt know the implications. Do the Div293 Tax and the tax free threshholds come into play if the SMSF income was counted in the gross income, but then effectively if that was the case it would be taxed, which it is not. So does the Pension LS or income count as Gross income for the purposes of the Div293 Tax or intepreting teh tax free threshhold?

How to account a Joining Bonus offer for an Investment

Jay3 — Fri, 24 Jan 2020 06:00:56 GMT

We invested in a Retirement product with 7-year term from SMSF which gave us a joining bonus. Both members are in Accumulation phase

As an example, say my investment was $170,000, eligible for a bonus of $3,400 and Stamp duty paid was $169. My opening statement shows $173,231. We understand that the stamp duty cannot be claimed as a Deduction as it is on Capital account, but what about the Bonus - do I have to declare as assessable income or not?

Re: LumpSum payments over 60

macfanboy — Fri, 24 Jan 2020 05:52:02 GMT

If they are tax-free then why do you need to know if they affect taxable income?

Different rules may apply for different scenarios eg pension from Centrelink etc.

Re: LumpSum payments over 60

Tomo — Fri, 24 Jan 2020 05:23:18 GMT

Macfanboy

Thank you for your response, but I am specifcally refering to LS or Pension paid and received after age 60 (at age 61 in fact) and after retireing but in the same year as retirement. Whilst tax free tax free do either of these effect the taxable income for that first year of retirement.

Re: LumpSum payments over 60

macfanboy — Fri, 24 Jan 2020 04:52:30 GMT

There are 3 parts to a superannuation lump sum payout:

(1) Taxable Component (Taxed) ---- This is tax-free once you turn 60.

(2) Taxable Component (Untaxed) --- This taxed at 17% up to the Untaxed Plan Cap Amount (1.515 million) and at 47% over that.

(3) Tax-Free Component - Tax-Free.

You may have taxable income on the Taxable Component (Taxed) if you received any payment BEFORE you turned 60.

LumpSum payments over 60

Tomo — Fri, 24 Jan 2020 03:51:53 GMT

I am over 60 and understand that LS and pension payments from my SMSF are tax free, but do these payments (only made after retiring earlier in the year) effect my taxable income in my first year of retirement?

Re: GST in SMSF

Jay3 — Fri, 24 Jan 2020 03:27:09 GMT

Thanks Bruce!! That is a complete reply and couldn't ask for more.

Re: Self managed super funds

Bruce4Tax — Fri, 24 Jan 2020 00:42:24 GMT

Can I create a self managed super fund and purchase a business?

In theory, possibly. In practice, no.

Am l able to get a loan with my SMSF to purchase the business?

LRBA rules would not allow this, unless the asset purchased was shares in a company or units in a unit trust.

Then you would not be able to acquire the shares or units from a related party.

The NALI rules would also need to be considered.

You would need to get expert advice before attempting anything like this.

Self managed super funds

Carlo — Thu, 23 Jan 2020 23:32:58 GMT

Can I create a self managed super fund and purchase a business? Am l able to get a loan with my SMSF to purchase the business?

Re: GST in SMSF

Bruce4Tax — Thu, 23 Jan 2020 21:56:35 GMT

https://www.publicaccountant.com.au/blog/gst-and-smsf

https://www.ato.gov.au/Business/GST/In-detail/Your-industry/Financial-services-and-insurance/SMSFs---GST-and-financial-supplies/

GST in SMSF

Jay3 — Thu, 23 Jan 2020 10:03:14 GMT

My fund is registered for GST as we do Commercial Renting. Is there any link to ATO site or a note to explain if GST can be claimed on GST Included Tax Invoices received for generating Assessable income. A checklist on what GST can be claimed and which GST cannot be claimed.

Re: Transfer balance cap

Bruce4Tax — Wed, 22 Jan 2020 22:01:03 GMT

The key words in the reference link are:

If, at any time, you meet or exceed your cap, you will not be entitled to indexation.

This means that if you have used the cap up to $ 1.6M already, then indexation will not help you.

If you have used 80% of the existing cap, then you will be able to use 80% of the indexation.

Transfer balance cap

YSC — Wed, 22 Jan 2020 05:04:25 GMT

If the cap increases by $36,800 by cap indexation, are we allowed to transfer that amount from the accumulation account to the pension account as long as the balance of the pension account not exceeding the transfer balance cap (1.6m+ any amount of indexation in line with CPI)? I also attached some info below for reference.

https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/Transfer-balance-cap/

Thanks,

Gia

Re: Former temporary resident claim for lost superannuation

KylieS — Mon, 20 Jan 2020 07:16:31 GMT

Hi ,

If you aren't able to contact us during business hours you could try live chat.

Thanks

Kylie

Re: SMSF

Bruce4Tax — Fri, 17 Jan 2020 07:02:07 GMT

Am I allowed to use the fund to purchase a computer which I will require to purchase shares, keep track of investments etc...?

Technically YES, but hardly any SMSFs do this because of the difficulty of proving that there is no private use.

At a practical level, this probably means showing that you have another computer that is used for all private purposes.

Catch 22 - if you have another computer, then you do not need to buy another in the fund.

There is no acceptable level of private use, and there is no apportionment like personal tax claims.

The consequences of private use = fail the sole purpose test = putting you whole fund at risk.

Re: SMSF

TaxedoMask — Fri, 17 Jan 2020 03:43:22 GMT

You can set it up using a corporate trustee - rather than 2 individuals if that works out better for you.

Computer sounds like a depreciable item under operational expense - but care to be taken regarding private use.

SMSF

stephchamp — Fri, 17 Jan 2020 02:48:46 GMT

If I set up a SMSF with myself as the only member, how many trustees are required by law? Am I allowed to use the fund to purchase a computer which I will require to purchase shares, keep track of investments etc...?

Re: TBC for SMSF

Bruce4Tax — Thu, 16 Jan 2020 22:54:58 GMT

I have a SMSF with two trustees, does each trustee have a TBC of $1.6m, making a total of $3.2m?

Trustees do not a TBC - members have a TBC.

In your SMSF, both trustees may be members but this is not a universal truth. For example, a fund with only one member may have two individual trustees. A fund with a single corporate trustee may have up to four members.

Each member has their own individual TBC - there is no adding them together to get a total for the fund.

One member cannot use the unused cap of the other member.

Re: Former temporary resident claim for lost superannuation

Matteo — Thu, 16 Jan 2020 17:59:27 GMT

Hi NateH,

thank you for your response. Is there any cost-free way to get in contact with someone capable to look into what has been found, as you suggested?

I have just tried to ring you guys up from EU (unsuccesfully as your business our aren't ours of course! clever of me) and the call costed 5€ to only listen a registed voice telling me your office was not opened, let alone how much would be staying at the phone waiting for the whole process.

Thank you a lot.

Matteo

Re: Former temporary resident claim for lost superannuation

NateH — Thu, 16 Jan 2020 03:02:40 GMT

Hi ,

On Community we don't have access to your records to check for you. If you wanted somebody to look into what has been found you would need to contact us over the phone using our overseas number.

Thank, NateH

TBC for SMSF

rpd — Thu, 16 Jan 2020 01:28:17 GMT

I have a SMSF with two trustees, does each trustee have a TBC of $1.6m, making a total of $3.2m?

Re: deductions relating to Self Managed Super Fund

Bruce4Tax — Sun, 12 Jan 2020 22:28:40 GMT

Me too!

Re: Former temporary resident claim for lost superannuation

Matteo — Sun, 12 Jan 2020 19:38:05 GMT

Hello there,

roughly two months ago, as previously kindly suggested by you, I have lodged my application to retrieve my lost Super fund using the " Searching for lost or unclaimed Super" module, sent from Europe via mail as required.

I have received no new ever since my documents were sent, all I know is that the mail reached the ATO as I was informed online of the national portuguese post website. How can I ascertain that my request was taken in consideration and my lost super and unclaimed accounts are being reviewed?

Thank you a lot for your support.

Matteo

Re: deductions relating to Self Managed Super Fund

MrBlackstock — Sun, 12 Jan 2020 06:27:44 GMT

Hello,

Thanks for getting back to me, it is good to get some reassurance, especially when trying to understand how the ATO explains things, sometimes I have to read things a few times to make sure I understand it clearly.

cheers, Mr Blackstock

Re: deductions relating to Self Managed Super Fund

Bruce4Tax — Sat, 11 Jan 2020 23:05:21 GMT

If I paid for the annual subscription with my own card, could I then receive a reimbursement from the SMSF I am a director of?

You are probably a director of the SMSF's trustee company, but not a director of the SMSF.

Reimbursement is OK, but better to make the payment direct from the SMSF to the card account.

as the subscription is for investment advice, then using the SMSF to pay for it would appear reasonable?

Yes, as long as there is no personal benefit to you or any associate. Best to demostrate that the SMSF actually makes use of the information received.

deductions relating to Self Managed Super Fund

MrBlackstock — Sat, 11 Jan 2020 13:06:09 GMT

As the director of the SMSF I spend a fair bit of time researching the share market for good investments. If i was to purchase annual membership in a company that specialises in advising subscribers of share market events, trends, and suggested stock purchases, could I use the SMSF cash to pay for this subscription?

One particular company requires payment via a credit card. If I paid for the annual subscription with my own card, could I then receive a reimbursement from the SMSF I am a director of?

I considered that as the subscription is for investment advice, then using the SMSF to pay for it would appear reasonable?

Any clarification on this would be much appreciated,

Cheers, Mr Blackstock

While I was looking through older posts I came across one asking a very similar question, I followed the suggested link and came across this under:

Investment-related expenses

The exact nature of the investment-related expenses is critical in determining deductibility. Examples of deductible investment related expenses include:

interest expenses
ongoing management fees or retainers paid to investment advisers
costs of servicing and managing an investment portfolio such as bank fees, rental property expenses, brokerage fees
the cost of advice to change the mix of investments, whether by the original or a new investment adviser provided it does not amount to a new financial plan.

If the investment related advice covers other matters, or relates in part to investments that do not produce assessable income, only a proportion of the fee is deductible.

From reading this, especially the highlighted sections, I am seeing that subscription fees relating solely to share portfolio investment suggestions would be deductible. As I am not creating a new financial plan, simply obtaining advice on altering the mix of investments, ie purchase and sale of shares as advised by the subscription, then I am thinking that I can subscribe to a internet based company that specialises in share market advice.

Any thoughts would be much appreciated,

Mr Blackstock

Re: Property through SMSF and questions regarding payment and ownership

Bruce4Tax — Thu, 09 Jan 2020 06:54:32 GMT

Each member has their own cap for contributions.

Your ability to make contributions may depend on:

* your age,

* your existing total super balance,

* work status if over 65, and

* whether the contriutions are to be claimed as a tax deduction or not.