Superannuation Titbits

From our November 2010 issue

 

Research on community attitudes into superannuation

The Minister for Financial Services and Superannuation recently released the results of a national survey conducted by independent market research company Colmar Brunton into community attitudes towards superannuation.

Among other findings, the research established that Australian taxpayers find superannuation complex, and are generally “confused and disenchanted”. The frequency of reform in this area has also caused concern.

We understand the community’s attitudes towards this particularly difficult area of tax law.

As increasing numbers of taxpayers establish self managed super funds (SMSFs) to obtain the tax advantages that may be gleaned from this form of investment for retirement, the complications and compliance burden faced by taxpayers increases on a yearly basis.

In addition, the potential consequences of breaking the rules in either setting up, maintaining or winding up a SMSF are significant.

If you are considering setting up or changing any of the particulars in relation to your SMSF, please ensure you obtain tax advice from a registered tax agent in relation to your plans.

Superannuation Guarantee Surcharge

Employers should consider the impact that an increase in the Superannuation Guarantee Surcharge may have on their business as the current Government has made this issue one of their priorities.

ATO warns of deviant behaviour by SMSFs

The ATO is targeting the provision of financial assistance by an SMSF to its members through an unrelated trust (such as by way of investing funds in a trust which trust will then use the funds to on-lend to a member of the SMSF). The ATO has warned that such activity may result in the funds being non-compliant and subject to tax at the rate of 45%.

The penalties for such behaviour are also significant:

  •  Trustees of super funds who provide financial assistance in this way face penalties of up to $220,000 and/or jail terms of up to 5 years for individuals.
  •  Corporate trustees face fines of up to $1.1 million.

 

NOTE
Superannuation is complex and confusing. Please see your tax advisor to obtain tax advice on dealings with your super fund if you are unsure about the consequences. If you would like to dicuss your situation with us, feel free to give a call on 1300 35 22 35 – we have experienced tax agents, accountants, financial planners and SMSF Specialists who can provide the information you need.

The ATO is policing the provision of financial assistance by SMSFs to members, either directly or through intermediate entities.

 

 

 

 

 

This information is for guidance only and is not intended as specific advice to any reader. Professional advice should be obtained before acting on any information contained herein. The publisher accepts no responsibility for loss occasioned to any person or organisation as a result of action or the refrain of action as a consequence of the contents of this publication.