SUPERCentral News
The ATO has issued SMSFRB 2020/1 ("SMSFR") to highlight its main concerns in relation to SMSF property development. It is comprehensive and traverses structuring, investment rules, NALI and the anti-avoidance provisions. SMSF trustees that enter into property development projects must understand the complexity of such ventures and implement all the applicable rules from start to completion in a manner consistent with retirement income objectives. All transactions should be carefully documented.
The trust deed is the most pivotal document of a self-managed super fund. The trust deed, together with superannuation laws, set out the governing rules of the fund.An up-to-date, compliant and high-quality trust deed not only meets regulatory and legislative compliance but provides express permissions that enable specific investments, retirement and wealth creation strategies to be implemented.
The ATO has finalised SPR2020/D1 in relation to Intermediary Limited Recourse Borrowing Arrangements. The commencement date of this Determination is 24 September 2007 and applies to all Intermediary LRBA established from that date.
The trustee must "deal at arm's length with the other party" is a requirement that underpins all SMSF transactions. While this ensures that SMSFs are not used as a scheme to artificially enhance concessionally taxed super benefits, failure to adhere to some aspects of this requirement may result in inadvertent contraventions with unintended tax consequences.
Recently the Australian Government introduced new regulations to temporarily enable legal documents to be signed and/or witnessed remotely via electronic signature. We are pleased to advise that you can now execute and witness SUPERCentral e-form documents electronically.
In the past month we have supported a number of urgent requests for estate plans for clients working in front line positions. In response, our associates Townsends Lawyers, have developed a streamlined estate planning process to quickly and effectively establish interim Estate Plans for those with pressing need.
The ATO has published guidelines for the process and procedures of the COVID-19 Early Release of Superannuation ("Early Release"). Registration of interest has commenced and application will open from 20 April 2020.
On 4th April 2020, the Acting Minister for Immigration, Alan Tudge, made an announcement to enable "most temporary visa holders with work rights to access their Australian superannuation to help support themselves during this crisis."
We are pleased to advise that we have now completed the primary pack of COVID-19 Tool Kit documentation.
The Coronavirus Economic Response Package Omnibus Act 2020 ("the Act") received assent on 24 March 2020. Schedule 13 of the Act amends the SIS regulations to make provision for COVID-19 temporarily early release of superannuation. Application for this early release must be made within the period of 6 months starting on the day the new regulation commences.
This covers the situation where an SMSF owns real property which is leased to a related party. The property is typically business real property due to the in-house asset restriction. The rent must be "no more favourable to the other party than those which is reasonable to expect would apply if the trustee were dealing with the other party at arm's length" (Section 109 SIS Act).
The downturn in the share market may result in the SMSF not meeting the 5% in-house asset limit at the end of the financial year. In such situation, the ATO will not undertake compliance activity if a rectification plan is in place by 30 June 2021, as follows:
The ATO considers that an SMSF investment strategy must be reviewed regularly at least annually and in the case of significant events. Major market correction and volatilities is a significant event in this regard. In relation to the coronavirus situation, the ATO accepts that short-term variations to the investment approach including asset allocations does not constitute a variation from the investment strategy but action must be taken to adjust the investments.
The SIS Regulations have been amended. There will be a temporary 50% reduction in the minimum pension limit applicable to the 2019-20 and 2020-21 financial years for allocated pensions, account based pensions and market linked pensions.
We have seen a marked increase in advisers requiring estate planning assistance for their clients. If you have clients with these needs please don't hesitate to call us on 02 8269 6266 to discuss how we can assist or go to our website.
Temporary early access to superannuation is an integral measure of the Government's Economic Response package to the coronavirus. In providing this relief, the Government recognises that early access to some super benefits for those significantly affected financially may outweigh the advantages of preserving these benefits until retirement.
Following the suite of new measures announced by the Federal Government last night in response to the coronavirus, the consolidated support package comprising the first and second tranches now amounts to $189 billion and represents 9.7% of GDP. These measures will provide welcome relief for impacted businesses and households. This article provides a summary of the relevant measures including superannuation, tax, support payments as well as the ATO measures.
The ATO has recently issued new guidelines in relation to SMSF investment strategy compliance. The rules or legislation in this regard have not changed but the ATO has stepped up its documentation requirements. The adoption of a tailor-made investment strategy approach by the ATO will necessitate changes in some industry practices. A "one size fits all" template is unlikely to deliver the required results. Financial advisers may potentially add value by their facilitation with the clients' SMSF investment strategy formulation and review under the new guidelines.
The new NALI provisions have been passed by Parliament and received Assent on 2 October 2019. The new rules are complex and many SMSFs may have to reorganise due to the introduction of the non-arm's length expenses (NALE) segment. This article provides information on the new rules, implications, interpretation issues and strategies going forward.