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Re: Rollover multiple accounts from one SMSF to another

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Newbie

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Hello.  This is my first time here. 

The scenario:  In an SMSF, a member has multiple Accumulation accounts plus multiple TRIS accounts.  They wish to leave that SMSF and transfer their benefits to a different, newly set up, SMSF which currently has only one account running - an Accumulation account.  They wish to end up with the same multiple Accumulation and TRIS accounts in the new SMSF (apart from the current Accumulation account in that fund) as they have in the original SMSF.

The questions:  Can what the member wants actually be done?  Is there any rule that says money must go into an accumulation account (in the new fund) before a TRIS can be started using it, even if immediately?  Would the grand total transferred from the existing SMSF have to become a single account in the new SMSF, seeing that would be banked into the new SMSF as a single amount?  If so, would the member then be stuck with having to calculate the minimum TRIS based on the entire balance of that account (which would require a greater withdrawal than is required)?

Any help in getting my head around this would be very much appreciated. 

 

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Devotee Registered Tax Practitioner

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Is there any rule that says money must go into an accumulation account (in the new fund) before a TRIS can be started using it, even if immediately?

Yes, contributions can only be accepted into an accumulation account.

 

Would the grand total transferred from the existing SMSF have to become a single account in the new SMSF, seeing that would be banked into the new SMSF as a single amount?

Yes, because a member cannot have more than one accum account.

 

If so, would the member then be stuck with having to calculate the minimum TRIS based on the entire balance of that account

No, because the member can chose how much of the accum account will be used to start a TRIS.

 

The member can have multiple TRIS accounts by starting them successively, but they all need to be separately documented.

 

 

 

 

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Best answer

Devotee Registered Tax Practitioner

Replies 4

Is there any rule that says money must go into an accumulation account (in the new fund) before a TRIS can be started using it, even if immediately?

Yes, contributions can only be accepted into an accumulation account.

 

Would the grand total transferred from the existing SMSF have to become a single account in the new SMSF, seeing that would be banked into the new SMSF as a single amount?

Yes, because a member cannot have more than one accum account.

 

If so, would the member then be stuck with having to calculate the minimum TRIS based on the entire balance of that account

No, because the member can chose how much of the accum account will be used to start a TRIS.

 

The member can have multiple TRIS accounts by starting them successively, but they all need to be separately documented.

 

 

 

 

Newbie

Replies 3

Thank you for the response Bruce.  I don't know who accepted your answer though.  It wasn't me!  However, it does seem reasonable.

 

I made a mistake in my original post in saying the member has multiple Accumulation accounts.  They in fact have one Accumulation but multiple Pension accounts.

 

Having said that, I have tried in vain to find where in the legislation it says a member is prohibited from having multiple Accumulation accounts.  The BGL Simple Fund software allows multiple Accumulation accounts, and I'm sure I've seen advice in the past on the internet by reputable people (ie SMSF administrators and the like) setting out reasons for having multiple Accumulation accounts, such as keeping accounts with different Taxable elements separate so that one can start pensions from the accounts with the highest Taxable elements first and run those down before others (to minimise the de facto 'death duty' payable on those balances if they are left to non-dependant beneficiaries).  Can you point me to where I will find that rule?     

Devotee Registered Tax Practitioner

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The answer lies in ITAR 1997  -      Subdivision 307‑DSuperannuation interests.

 

Subdivision 307‑DSuperannuation interests

307‑200.01  Application of Subdivision 307‑D to Subdivisions 291‑C and 293‑D of the Act

                   This Subdivision does not apply for the purposes of:

                     (a)  calculating an amount of contributions under Subdivision 291‑C of the Act; or

                     (b)  calculating low tax contributions under Subdivision 293‑D of the Act.

307‑200.02  Meaning of superannuation interests

                   For subsection 307‑200(2) of the Act, every amount, benefit or entitlement that a member holds in a self‑managed superannuation fund is to be treated as 1 superannuation interest in the superannuation fund unless the amount, benefit or entitlement is to be treated as 2 or more superannuation interests in accordance with 1 of the other arrangements in this Subdivision.

 

( Then further reg sections define how a member can have more interests as long as they are income streams. )

 

Moderator

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Hi @JimR,

 

Further to @Bruce4Tax's great response, there's some information on our website about how many interests a member can have in their super fund.

 

Thanks, NicM.

 

 

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Newbie

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Thank you Bruce and NicM.  Sorry for the delay in acknowleging your replies.

I note that both the references quoted (ie Section 307D and the info on the ATO website) talk about "interests" rather than "accounts" which was what I was asking about.

It seems to me that there is nothing precluding a member of an SMSF from having more than one Accumulation ACCOUNT.  All such accounts, though, must be aggregated for any purpose that requires calculation or other determination at the member's INTEREST level (which virtually everything does).  Given that, there would appear to be no point in a member actually having more than one Accumulation ACCOUNT in a SMSF.  I said in my previous post here that BGL Simple Fund allows more than one Accumulation account for a member.  However, I note that their newer product - Simple Fund 360 - only allows one such account per member.  Perhaps that is why - there is just no point having more than one.          

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