SUPERCentral News
All deeds are not the same. A deed to establish a discretionary trust is different to a deed to establish a unit trust. A deed to establish a family trust is different to a deed to establish a superannuation fund.
We've heard reports that some real estate spruikers are offering SMSF trustees holidays in Bali if they will seriously consider purchasing investment property from the spruiker's company.
The (previous) Government kindly and thoughtfully, not only brought forward the time for payment of the SMSF levy but also increased the amount of the levy.
The statutory rate at which base amount splits in SMSFs are to be adjusted is 7.3% pa. If a base amount has to be adjusted (eg because it has not been converted before the operative time) then the adjustment will be at the rate of 7.3% pa calculated for each day of the adjustment period.
If the market value of segregated assets exceeds the account balance of account-based pensions, then the relevant tax provision provides that, to the extent of the excess, those assets are not segregated assets.
The Determination notes that where the market value of segregated assets exceeds the pension account balance, the excess assets cannot qualify as segregated assets.
An asset will be segregated when the asset is "invested, held in reserve or otherwise dealt with" to support its liabilities in respect of superannuation income streams.
The payment of general fund expenses from a segregated bank account will not cause the bank account to cease to qualify as a segregated asset.
The Determination raises the prospect that the ATO may seek to apply Part IVA to asset disposals where the asset was only recently segregated prior to the disposal.
As a general statement where a fund has both pension interests and non-pension interests, it will be better to have two separate bank accounts.
Two or more segregated assets could be pooled to support more than one pension interest.
It is possible for a pension interest to only partially be supported by segregated assets.
As segregation occurs on an asset by asset basis, the decision of the trustee to segregate an asset must specifically identify the asset.
However, the existence of reserves (investment, operational risk, etc) means that not all assets will be segregated assets.
Trustees must initiate the segregation of an asset. Segregation requires a decision of the trustee and implementation of that decision.
A single asset could become a segregated asset on, say, 1 January of a financial year.
It is not possible to retrospectively segregate an asset.
One particular share in a company can be segregated while another share in the same company need not be segregated.
If the fund holds real estate - then either the real estate is segregated or it is not segregated.
Segregation occurs on an asset by asset basis.