Masterclass SMSF – End of Financial Year review – Ensure all is in order!

Masterclass SMSF – End of Financial Year review – Ensure all is in order!

SMSF – End of Financial Year review – Ensure all is in order!

Only 5 weeks to the End of Financial Year left – time to have a final review to ensure all is in order and all papers documenting all transactions during the year, are in hand and ready for auditor and accountant verification. Here are some other tips to consider –

1.       Contribution Caps
The concessional contribution (tax deductible / employer) cap for 2015/16 is $30,000, or $35,000 for members who were aged 50 years or over. If you had more than one fund, ALL concessional contributions made to ALL your funds were added together and counted towards the cap. This cap was not indexed. MORE HERE
2.     Minimum Pension taken

If there are members in the pension phase, ensure they have received the required minimum pension amount by 30 June. Failure can result in the investment income derived from your assets supporting that pension no longer being exempt from tax and other penalties could apply. MORE HERE

3.     Claim Tax Deductions for Personal Contributions (Non-Concessional)

If you are claiming a tax deduction for your superannuation contributions, make sure you are eligible to claim the tax deduction – seek advice if you’re unsure. An error in over-contributing or claiming a tax deduction for personal superannuation contributions could have excess tax consequences.

4.     Off-Market Transfers

You are still eligible to conduct in specie contributions of shares to your fund. Listed stock held in your personal name can be transferred to your fund as non-concessional or concessional contributions (if eligible) to your SMSF. Consideration should be given to capital gains tax, contribution caps and the off market transfer procedures.

5.     Government Co-Contribution

Remember to take advantage of the Government co-contribution by making a non-concessional (after tax) super contribution before the end of the financial year. For every dollar of eligible contributions, the Government contributes 50 cents to your superannuation up to a maximum government co-contribution of $500. The maximum government co-contribution (scaled as income rises) is payable is for income between $35,454 to max $51,021  Year 2015-2016

6.     Investment Strategy was followed

Review your investment strategy and ensure all investments have been made in accordance with it, and the SMSF trust deed. Also, make sure your investment strategy has been updated to include consideration of insurances for members.

7.     Insurance Policies

From 1 July 2014, new rules come into effect that will prohibit superannuation fund trustees from providing an “insured benefit” in relation to a member unless the insured event is entirely consistent with a superannuation condition of release. This means that trauma policies and own occupation Total and Permanent Disability (TPD) policies will not be permitted. However, it is important to note these new rules will not apply to policies taken out prior to 1 July 2014.

8.     In-House Assets

If your fund has any investments in in-house assets you must make sure that at all times the market value of these investments is less than 5% of the value of the fund. Do not take this rule lightly as the new SMSF penalty powers will make it easier for the ATO to apply administrative penalties (fines) for smaller misdemeanours ranging from $820 to $10,200 per breach, per trustee!

Got questions? If you want experts who have years of helping others, without the hype – Then call for a FREE strategy session today and also get your FREE Expert Guide – Self-Managed Super and You – Top right hand side above.

If you have any questions, why not give us a call – it’s FREE also! No obligation. 0407 361 596, Paul.

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CASE STUDY – Gary & Purina – Need to sort out super funds and life insurance

CASE STUDY – Gary & Purina – Need to sort out super funds and life insurance

Gary & Purina – Need to sort out super funds and life insurance

WHERE they were atGary and Purina were early 60s and late 50s and knew they needed to sort out several super funds and life insurance. They had a work super fund that puzzled them, not looking like one of the regular commercial funds. They owned their home, valued between $500-700,000 and children were all settled and doing fine. He would work as long as he could as he had no desire to retire from his factory work.

What they WANTED to haveGary could not work out why they asked him to sign papers for this other work super fund each year. He was also wanting to ensure his life was covered OK as he expected his wife would out-live him. They would like to have a trip back to their European country of origin in a few years, but being around family was most important. If there was a little extra above the Government Pension, that would be a bonus.

What it would COST Talking with the advisor, they estimated an annual income required would be $30-40,000 in today’s money. But extra for the trip and supporting their grandchildren would be appreciated.

What they would NEEDTo be safe, if a conservative investment return of 5% is used, (one 20th of 100%) this meant they required at least 20 times the income goal – that rounded to approx. $600-800,000 in income-producing assets other than family home.

What to do NOW Their current super was growing with SG contributions form Gary’s employment about $120,000 and the other super fund had about $65,000. The advisor would investigate this other work super fund – and rollover the amount to consolidate and simplify. Unfortunately we found that it was an old -form of Self-Managed Super Fund and the original creators were no-longer available, nor could we find how to get the Trust Deed and who was looking after past accounts. It became such a timely and frustrating exercise to get the Trustees to agree to help,  that even the ATO advised it seemed best to leave it for now.

Gary liked that the SuperBenefit Programme had a CONNECTOR/ASSIST service which could help them know who to talk to for other help besides the advisor, such as a broker who supplied a list twice a year after reporting season, of financial data on companies with strong financial health that are likely to perform well.

We were instructed by the planner to set up the SMSF and applied to the super funds to roll-over to the new SMSF bank account. The planner assisted in many doctor and specialist visits and they made application to claim on the insurance for the terminal illness.

They would speak to the stock broker about the list he had created for SuperBenefit clients, of healthy Aust companies based on the 12 financial health criteria. Since 2010 clients have made returns ranging from 3-18% in certain years.

They also had peace because any queries or compliance issues, could simply be directed to SuperBenefit the administrator, who would CONNECT them to the right advisors as required (SMSF Connector/Assist Service)

They now had the components in place –

Strategyto take control of the retirement plan, and build super

Structure an SMSF using SuperBenefit administration,

Support with resources and all compliance taken care of by SuperBenefit, as well as a team of specialist professionals that the SMSF Connector service provides

Note – This is a simplified summary of one client – We recommend asking for a FREE consultation and/or seeking further professional advice with our recommended advisors or your own.

Got questions? If you want experts who have years of helping others, without the hype – then call for a FREE strategy session today and also get your FREE Expert Guide – Self-Managed Super and Youtop right hand side above.

If you have any questions, why not give us a call – it’s FREE also! No obligation. 0407 361 596, Paul.

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SMSF Property – Property and SMSF – How can you own or borrow to buy property in SMSF?

SMSF Property – Property and SMSF – How can you own or borrow to buy property in SMSF?

SMSF Property – Property and SMSF – How can you own or borrow to buy property in SMSF?

Many people ask us and our partner advisors – how can you own or borrow to buy Property in my SMSF – Self-Managed Super Fund? Here are the facts, and you can get all the details in our coming May seminar in KNOX, Melbourne (FREE) SMSF and Property Investment

SMSFs can buy a property – two ways

  1. Outright for the full value and purchase costs, legal etc, and/or –
  2. Borrow to purchase, section 67(4A) SIS (SMSF can’t directly borrow, only acquire by instalment)
  • Need about 30% deposit + costs approx 10%
  • Special loan (Limited or No-Recourse loan) where the lender has security over the property only, and have no security over other SMSF assets
  • Special Structure required – Custodian/Bare Trust that borrows and “holds” property, until the loan is paid out, and  avoids Stamp Duty and CGT and GST when transferred back to the SMSF (with the right clauses)
  • SMSF has a beneficial interest
  • Once loan repaid, legal ownership is transferred to the SMSF
  • Expenses – Set Up can be up to $3-10,000 (ask us about our competitive costs)

We’ll cover more details in the next seminar at Knox – SMSF and Property Investment

To learn more about this and the following topics –

  1. What’s involved in an SMSF and does it suit you?
  2. I want my business to be my super – can I do this and how?
  3. Should I borrow to buy property for my SMSF?
  4. Can stock market shares be included in the investment mix?

see Seminar page Property Boost to Super

Want to know the options and how property works in SMSF?

See our next Seminar with Property Friends.

Or call for free education, or to speak to an advisor about your specific situation. SuperBenefit works with SMSF trustees to CONNECT them with the advisors they need. A call is Free. If you have any questions, why not give us a call – it’s FREE!

No obligation. 0407 361 596, Paul

Posted in Masterclass Investment, Property Investing, SMSF Investing, SMSF Property | Tagged , , | Leave a comment

Basics about Super – Super and Death Benefits – how does it work? (Super Death Benefit)

Basics about Super – Super and Death Benefits – how does it work? (Super Death Benefit)

Basics about Super – Super and Death Benefits – how does it work? (Super Death Benefit)

The Australian Tax Office (ATO) confirms that super is not part of a person’s estate (usually), and the Trustees who control and run a super fund or Self-Managed Super Fund (SMSF), determine where the money goes.

The ATO site tells us –

Superannuation (super) doesn’t generally form part of a deceased person’s estate unless the trustee of the super fund pays it to the estate under the terms of the trust deed and the super rules.

In most cases, when a person dies their super fund will pay their remaining super to the person they have chosen as their nominated beneficiary. Super paid after a person’s death is called a ‘super death benefit’.

If there are no binding death nominations, the trustee of the super fund will decide how the benefit will be paid depending on the trust deed and super law. If the super fund trustee pays it to the deceased estate, the executor will deal with it as part of the estate.

If you believe you’re the beneficiary of a deceased person’s super or are the executor of a person’s estate, you should contact their super fund to let them know that the person has died, and ask them to release the super. If you don’t know the details of the deceased person’s super, you can Check your super look for their accounts.

The tax treatment of a super death benefit depends on whether the:

  • Person receiving the benefit is a dependant or non-dependant of the deceased person, and
  • Benefits are received as a lump sum or income stream.

If you receive a death benefit as the executor of a deceased estate, the estate pays tax on behalf of the beneficiaries of the super on the same basis as would have applied if the payment was paid directly to the beneficiary, excluding the Medicare levy.

And other links and info on the ATO page are –

Got questions? If you want experts who have years of helping others, without the hype – then call for a FREE strategy session today and also get your FREE Expert Guide – Self-Managed Super and Youtop right hand side above.

See our next seminar/webinars above.

If you have any questions, why not give us a call – it’s FREE also! No obligation. 0407 361 596, Paul.

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Masterclass SMSF – Why is the trust deed the most important document when a member passes away?

Masterclass SMSF – Why is the trust deed the most important document when a member passes away?

SMSF – Why is the trust deed the most important document when a member passes away?

The SMSF trust deed is the first and most important document when a member passes away as it has the rules and determines how the death benefits are distributed. The trust deed sets out how death benefits are treated, especially if the deceased member had left conflicting instructions, but primarily because super is NOT part of an estate unless directed to go there.

In one complex example, an SMSF member signed a binding death benefit nomination signifying the sole recipient of their death benefit was to be their legal personal representative, that is, their estate, while also having a reversionary pension in place – but what was contained in the trust deed would determine the final outcome. Many deeds say that a binding death benefit nomination takes precedence over a reversionary pension, and others choose to go the other way. If the rules of the trust deed and governing rules of the reversionary pension were set up properly, the binding death benefit nomination would play a secondary role.

However, if the deed could not resolve the issue, court proceedings might arise as a result, so to avoid the heartache and costs for the trustee and the potential beneficiaries in the future, it is recommended that trustees conduct an immediate review with their advisors determine what is allowed, but also if any member had both a reversionary pension and a non-lapsing binding death benefit nomination, and find out if they were consistent, which arrangement might prevail under the trust deed and amend the trust deed if necessary.

Got questions? If you want experts who have years of helping others, without the hype – then call for a FREE strategy session today and also get your FREE Expert Guide – Self-Managed Super and Youtop right hand side above.

See our next seminar/webinars above.

If you have any questions, why not give us a call – it’s FREE also! No obligation. 0407 361 596, Paul.

Posted in Masterclass SMSF - advanced issues, Super Law & Compliance, Super Tax, Superannuation General | Tagged , , | Leave a comment

MASTERCLASS Investing – Property Investing is more successful when thinking National, not Local

MASTMASTERCLASS Investing – Property Investing is more successful when thinking National, not LocalERCLASS Investing – Earnings per Share (EPS) Analysis – How investors use EPS

Investing – Property Investing is more successful when thinking National, not Local

One of our Business Partners, Property Friends, explains why property investing is more successful when you are thinking National, not local when looking for areas to invest

Regular readers of our newsletter will know of our nationwide search for property that provides you with the highest, safest returns with minimized risk. Peter McRae, a winner of Your Investment Property’s Investor of the Year Award, agrees. He says. “When people look for investment properties in familiar areas, they can focus too much on trivial things at the expense of the real issue, which is whether or not there are growth drivers”.

Don’t be afraid to buy sight unseen: “Most people feel comfortable buying in their local area, but usually only because they are used to living in the area. Comments such as ‘I’ve lived there all my life’ are common, but it is not a reason to purchase there for an investment,” Peter says.

Secondly, he argues that when you see the property, you are also more likely to be affected by emotional decisions that are not relevant. These can include whether you like the kitchen or not. Therefore, seeing the property can actually be counterproductive.

Use a buyer’s agent: The first place to begin is to look for areas that are due to grow soon. He does this either by buying property reports or by speaking to his buyer’s agent.

Buyers agents are invaluable because they tend to know the areas well – from an investing standpoint. They develop good relationships with local agents, and their negotiation skills are exceptional because they do it every day,” he says. This is also what Property Friends does. McRae also believes that buyers’ agents are an especially good option for people who are unfamiliar with buying interstate. “I found that I learnt an enormous amount of information from my buyer’s agent, and it saved me making mistakes.”

Following that, his next step is to make sure the area has good rental returns, preferably above 6%. Once the area has been decided on, then it’s a case of finding the property.

These comments were posted on popular, independent website “Your Investment Property” and it seems as if this award winning investor has been reading our newsletters – as his thoughts are aligned with ours. In summary, he believes investors should:

  • Look nationally
  • Complete thorough research
  • Hire a professional negotiator/buyer’s agent
  • Enjoy increased returns

We also like to add that there are a number of other areas to review before making an investment in property. When evaluating a new development for purchase, we investigate the area’s vacancy rates, clusters of social housing, nearby industrial/commercial developments/infrastructure/schools etc, traffic flow [during peak and off peak times], council and insurance rates plus stamp duty and land tax structures. These factors affect long-term property growth and rental prospects.

That’s why they are carefully considered by Property Friends when researching a new development deal for you. Think of all the time and uncertainty our due diligence will save you. We do all the work including ongoing support to ensure you have a successful Property Investment portfolio. To find out more call Uwe (03) 9758 5331 Melb Australia or www.propertyfriends.com.au.

(As posted on Linked-in Pulse)

Want to know the options and how property works in SMSF?

See our next Seminar with Property Friends.

Or call for free education, or to speak to an advisor about your specific situation. SuperBenefit works with SMSF trustees to CONNECT them with the advisors they need. A call is FREE.

If you have any questions, why not give us a call – it’s FREE!

No obligation. 0407 361 596, Paul.

Posted in Investing - Stock Fundamentals, Masterclass Investment, SMSF Investing, SMSF Property | Tagged , , | Leave a comment

NEWS – Withdrawing funds illegally from an SMSF is a top recurring trend

NEWS – Withdrawing funds illegally from an SMSF is a top recurring trend

Withdrawing funds illegally from an SMSF is a top recurring trend

Krystine Lumanta at SMS Magazine reports 

Trustees withdrawing funds illegally from their SMSF was a top recurring trend throughout last year and was expected to continue in 2016, according to an SMSF auditor.  “During 2015, the same issue has cropped up: trustees taking money out of the account, usually for their business because they have cash-flow issues, or trustees inadvertently taking money out of an account because they have multiple bank accounts and they’ve clicked on the wrong one,” SuperAuditors director Shelley Banton told selfmanagedsuper.  “Even if they may have corrected it, was it in a timely manner?  “Also, there needs to be some explanation and information about why that transaction has happened because once the money comes in, it’s quarantined as a contribution and once it goes out, if it doesn’t meet a condition of release, then it is illegal early access.
“We’ve seen people paying for expenses for the fund out of their own pocket several times and then had the fund repay them and if they’re doing that on their credit card, for example, you’d have to question whether they’re getting reward points, et cetera.”
Banton stressed it was up to trustees to use extreme caution as she did not believe stricter regulations would solve the problem. “While you’ve got several accounts with the one financial institution or bank, there’s always a possibility that you’re going to click on the wrong one – that’s just a fact of online life,” she said.
“You can’t get to the point where you mandate trustees to have a separate account entirely which is not linked to any other account online. “I don’t know how that would be regulated and it wouldn’t be something that I’d want to look at come audit time. And it would be more red tape instead of less.”

Read More.

Want to know the options and how property works in SMSF? Call for FREE education, or to speak to an advisor about your specific situation. SuperBenefit works with SMSF trustees to CONNECT them with the advisors they need. A call is FREE.

If you have any questions, why not give us a call – it’s FREE! 

No obligation. 0407 361 596, Paul.

Posted in News & Stats, Retirement Planning, SMSF Info, SMSF Investing, SMSF Property, Superannuation General, Uncategorized | Tagged , , , , | Leave a comment