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Re: commuting an account based pension

This post is archived and may not be up-to-date.

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Devotee

Replies 9

Srry I should have been a bit clearer ...  did mean to say amend prior year rtns ...

 

the smsf has two members and the member numbers have been recorded incorrect on prior year smsf rtns members statement .. and by that I mean the members statement that are part of the smsf rtns.

 

 

so let me try to rephrase my question ...

 

If the most recent SMSF return is lodged and the incorporated members statement has the correct member number on it, will that that just update the ATO records or do I have to lodge prior year SMSF rtns with amended members statement that reflect correct member numbers ?  

 

Srry but having some difficulty trying to explain myself here.

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Devotee Registered Tax Practitioner

Replies 8

 

so are you saying that the lodgement of current smsf rtn with correct member number will be just fine ???

 

Absolutely!

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Devotee

Replies 0

 
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Devotee

Replies 6

Was editing my prior response whilst you were replying ..

 

Srry I should have been a bit clearer ...  did mean to say amend prior year rtns ...

 

the smsf has two members and the member numbers have been recorded incorrect on prior year smsf rtns members statement .. and by that I mean the members statement that are part of the smsf rtns.

 

 

so let me try to rephrase my question ...

 

If the most recent SMSF return is lodged and the incorporated members statement has the correct member number on it, will that that just update the ATO records or do I have to lodge prior year SMSF rtns with amended members statement that reflect correct member numbers ?  

 

Srry but having some difficulty trying to explain myself here.

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Devotee Registered Tax Practitioner

Replies 5

No amendment is required.

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Devotee

Replies 4

Thanks for you time Bruce, Im guessing you have done updated MCS before by just lodging the clients next MCS with members correct information.

 

I just can not get over how the ATO even their specialist area do not know the answer to what I thought was a simple question, even today they are still struggling with the issue and finding it difficult to provide me with a direct solution..... and they can not confirm that by providing updated information in next MCS will be fine ... its just amazing ....   and thats why when you answered my questions I was a bit sceptical ..... the ATO have confused themselves and myself over this and Im just going to wait and see if they finally come up with a resolution along what you have mentioned ....

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Devotee Registered Tax Practitioner

Replies 3

SMSFs do not lodge MCS forms  -  that is for large funds.

 

The member information is on the SMSF annua return.

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Devotee

Replies 0

yes, that what I was referring to0 ....  mcs that is part of the annual rtn .... one day I will get my terminology right

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Devotee

Replies 1

Hi Bruce,  jst thought of something, if one solitary payment in a financial year is not a pension, then what about this senario - 

 

2018 F.Y.   - Pension started 7 June 2018 

- no payment made for 2018 fy, as no payment required as it starts in June.

However a liability to pay does exist for the financial year, as the pension payment is otherwise payable but for the fact that no pension payment is required under the legislation.

 

2019 F.Y. -  January 2019 one annual pension payment made meeting minimum payment requirements.

- pension commuted in May 2019.

 

Seems to me that as a liability exists in both financial years and this could be a pension. what are your thoughts?

 

Devotee Registered Tax Practitioner

Replies 0

 

Seems to me that as a liability exists in both financial years and this could be a pension. what are your thoughts?

 

The liability to pay a pension is a concept that is relevant to the definition of an income stream.

 

The ATO says:

 

An income stream is a series of periodic benefit payments to a member. Income streams from an SMSF are usually account-based, which means they are related to the member's fund account.

An income stream is a pension if the payments occur at least annually and, for an account-based pension, a minimum amount is paid to the member each year.

If these standards are not met in a financial year, the income stream ceases for income tax purposes and we consider the SMSF has not paid an income stream at any time during the year.

ATO  QC 42480

 

So, the definition of an income stream  =  a stream of payments  => more than one payment during the life of the income stream.