Getting ATO advice for your SMSF: Rulings and fund specific advice
If you’re unsure how the SMSF rules and regulations might apply to your fund, it’s worth going direct to the horse’s mouth – that is, the ATO.
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Garth has worked in the Australian Superannuation industry for over 20 years with a specific focus on self-managed super funds. He provides ongoing support and training to individuals as well as to professionals working in the superannuation area, including advisers, accountants and lawyers. He is a regular contributor to industry publications and to the leading professional bodies including Chartered Accountants Australia & New Zealand (CA ANZ).
If you’re unsure how the SMSF rules and regulations might apply to your fund, it’s worth going direct to the horse’s mouth – that is, the ATO.
If you have more than $3 million in super and are looking to reduce your balance and future tax, consider these issues first. Time is slipping away.
The increase in contribution caps from 1 July provides opportunities for SMSFs to potentially get up to $57,500 tax-deductible contributions into their super this financial year. Here’s how.
Q: I am interested in the apparent loophole that allows a pension fund to go above the applicable cap. In my case $1.7 million. On the ATO website it states that if your Total Super Balance on 30 June, the previous year is less than $1.48 million then non-concessional contributions for the first year can be $330,000. Thus, effectively making your new total super balance $1.81 million i.e. greater than the $1.7m cap. Can you explain any pitfalls in using this strategy to maximise funds in pension phase?
Q: Can you explain the conditions or requirements pertaining to lump sum withdrawals from a self-managed super fund in pension mode?
Q: I’m 67 years of age, and I’ve kept my SMSF in accumulation phase so far. There is only about $200,000 in my SMSF. I’d like to take a $7,000 lump sum out of my SMSF if possible. If I do this, will I need to provide a TBAR or some other kind of report to the ATO?
Q: I have maxed out my non-concessional contributions ($330,000) in July 2023. When is the earliest I can make new non-concessional contributions?
Q: Is there a cap on the total balance (accumulation and income funds combined) one can have in super once one has set up an income stream pension? What is the rule for a 67-year-old?
Q: I have just retired at the age of 60, mainly to access my Super returns tax free. Do I also have to start a pension, or can I delay that a few years, so I don’t have to start withdrawing the minimum 4% annually?
A: There are lots of similar questions on this topic. First of all, I believe that SMSF liquidity and SMSF diversification will become even more important.
Q: I would love to understand a little more about segregating assets on reaching pension phase. i.e. how it works in practice and reasons when such a strategy might be appropriate?
With contribution caps set to increase on 1 July, people need to weigh up their options before making additional super contributions before and/or after June 30.
Q: I know that you can easily combine multiple super funds that are in accumulation mode, but can you do it for accounts that are in pension mode?
Q: I am about to transfer all our accumulation funds into income funds for retirement income as we are now retiring. Our combined minimum drawdown at 4% will be more than what our living expenses will be, so I am exploring options to put the left over dollars.
Using your SMSF to invest in a related trust or company can be a sound financial move, but strict rules apply so read on before you act.
For various reasons, SMSF members may want to roll an existing pension into a new super fund, but the process is not as simple as it could be.
Q: My wife and I wish to start a pension in our SMSF soon. Do we have to wait until July 2024 or can we start one now? How do we tell the minimum? Is it still based on our 30 June 2023 balance?
Most SMSFs don’t need to worry about GST, but it’s important to understand the rules in case your fund does need to register.
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