SMSF Hot Topics

Hansens Accountants – Wednesday, March 05, 2014

By Brett Hansen

Recently I ventured up to Brisbane to attend the Self-Managed Professionals Association of Australia (SPAA) National Conference.

After an absence of a couple of years, I was looking forward to numerous sessions over the three days to see what has been happening in the world of Self-Managed Super, the hot topics and what is on the horizon.

The Conference is designed for advisors and covered a broad range of areas including compliance, strategy and investment, allowing the opportunity to follow your particular passion. In my work with SMSF’s I’m always keen to see what strategies are being driven by the industry to ensure our clients are always at the fore-front.

Rather than bore you with the mundane tech talk from an accountants view, I’d like to share a snapshot of some of the hot issues that were on the agenda

For Businesses…

At 1 July 2014 SuperStream begins! All businesses with more than 20 employees will need to comply with the changes to the method of payment and reporting of Super contributions. This is a requirement of all types of Superannuation Funds. SMSFs need to ensure that they are set up appropriately prior to 31 May 2014.

For Individuals…

There has been a large discussion in the media, speculating SMSF has fuelled a false property boom due to the ability to borrow in Super. In reality, this is hugely overstated. ATO statistics indicate that geared property in SMSF’s actually make up less than 0.5% of their total investments.

Compliance rules for SMSFs have recently been tightened and the Coalition Government will proceed with providing the ATO with more flexibility and new penalty powers when dealing with non-complying SMSF’s.

The “d293 tax” will be enforced, where anyone who earns over $300k will pay an extra 15% on their contributions

The continued benefit of starting your pension and deriving income and Capital Gains TAX FREE!

There are now around 960,000 members of SMSF’s in Australia!

SMSF’s now hold over $560m in net assets, and form a large part of the $1.2 Trillion in Superannuation in Australia. As compulsory employer contribution rates increase this will only continue to grow

The solemn realities…

Talking openly (though not particularly brightly), what is going to happen when the inevitable happens? Logistically, when we die who gets the money, how, and what will be the tax impact?

We heard about some great planning strategies but also some horror stories when trustees and members do not understand or do not plan properly. Are you aware of the ability of a member, or more importantly the beneficiary of a member, being able to take action against the SMSF trustee for not considering all the requirements for each member, including insurance, estate planning, investment strategy etc.?

What happens to property that is owed in an SMSF if the member/s die?  Do they have to sell?

Centrelink are changing the rules on how pensions paid from an SMSF will be deemed income.

How living off your Superannuation Fund is so much better than worrying about an extra dollar from the Government.

What it boils down to…

The SMSF industry is continuing to grow, and with that growth is the ability for organisations like SPAA to be involved in policy making and influence the industry. I know a lot of people are still wary of Super due to the changing policies of different governments, but I also know that with an aging population and an increasing burden on the public purse for those “Baby Boomers” our Superannuation Funds, whether they be SMSF’s, Industry, Retail or Defined Benefit Funds, need to be supported for our Country to be able to support every individual in retirement.

 

 

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