Around 7 out of 10 SMSFs have individual trustees, the majority with 2 spouses acting as joint trustees (e.g. husband and wife). Under these circumstances, you must have an Enduring Power of Attorney (EPoA) in place. The likelihood of one (or both) trustees losing capacity before death is high and without an EPoA, the consequences […]
You’ve probably heard the terms franking credit, imputation credit and franked dividend before. These terms all relate to the dividend imputation system associated with investing in Australian shares. In simple terms, before a company distributes a dividend to shareholders, it will have often (but not always) paid company tax of 30% on the payment already. […]
The ATO recently provided clarification around its position on fund-capped contribution limits for superannuation funds (ATO ID 2012/79, sub regulation 7.04). The limits only come into play where: 1) A person under age 65 contributes more than $450,000 in a single contribution to a super fund, or 2) A person aged 65 or older contributes […]
Self-managed superannuation funds (SMSFs) continue to increase in popularity. There are now more than 480,000 SMSFs in existence and it is expected that 2013 will see the one millionth SMSF member. Furthermore, SMSFs now make up about one third (or $450 million) of Australia’s $1.4 trillion superannuation system and the average fund balance is around […]
It is considered best practice to establish a self-managed super fund (SMSF) with a company acting as trustee, yet around 70% of the 488,000 SMSF’s in existence have individual trustees. Why? The reason is simple; cost. Establishing a SMSF with a corporate trustee typically adds more than $1,000 to the setup cost compared to establishing […]
Using a Limited Recourse Borrowing Arrangement (LRBA) to invest in property via your SMSF is one thing, but using borrowings to finance property development is something else altogether. Whilst the current rules (stated in section 67A and 67B of the Superannuation Industry (Supervision) Act 1993 (SIS Act)) allow you to finance a property in your […]
When you retire (or semi-retire) from work, a usual practice is to establish an account-based pension (ABP) from your SMSF to provide retirement income. When this occurs, the assets funding the pension payments (e.g. cash, shares, property) are transferred from accumulation phase to pension phase. Whilst you are younger and working full-time, typically all your […]
