One of the key concepts with having an SMSF, is that as trustee you must preserve the assets of the SMSF for your retirement. With that in mind, the ATO is exceptionally clear that as trustee you must not treat the assets or income of the SMSF as your own – it’s not, it belongs to your future self in the form of retirement income.
With that in mind, it’s important to remember that when the SMSF owns a commercial property and you in your capacity of operating a business, lease the property, it must be treated as though you were in fact leasing the premises from someone else. This is what is referred to as Arms Length transactions.
Arms length transactions are the type of transaction where two independent strangers are making an agreement, neither one wants to get the worse end of the deal. These type of transactions are generally determined by the current market situations. Take Rent for example, if you were in an area that had surplus office spaces which high levels of vacant offices,
The end of the financial year is the perfect time to give your SMSF some love. The following are our top 10 pre-30 June items we believe every SMSF trustee should look at.
- Take your minimum pension!
- Maximise contributions
- Review your SMSF investments
- Pay any outstanding taxes or fees
- Valuations for EVERYTHING
- Update your SMSF trust deed
- Is it time for an SMSF trustee company?
Take your minimum pension!
If you are taking a pension from your SMSF, you need to make sure you’ve taken the minimum required amount before 30 June to enjoy all that juicy tax free income and refunds of franking credits!
Chloe Ward chats about the budget, non-concessional contribution caps and wraps up the month as we all prepare for the election that is just around the corner.