Estate Planning is a crucial component to the management of your superannuation assets. In light of this, attention to Binding Death Benefit Nominations (BDBNs) should surpass ‘just filling in a form’.
In just over four weeks will be in a new financial year. Understanding what you could do before and after 30 June 2014 can provide the icing on the cake for employees, investors and those in small business. Such things as bringing forward tax deductions or delaying the receipt of income within the rules can mean less tax this year. When it comes to superannuation, make sure you maximise the tax deduction this year or salary sacrifice the right amount so you get the best possible outcome and don’t end up with tax penalties.
2014 Budget Summary
Superfund Partners Director and wordsmith Mark Beveridge has distilled the government spin doctoring down into a few pages of need to know information. It doesn’t cover every dollar saved or spent, but it will help answer your most common questions.
There has been a flurry ATO activity recently – with the latest target being the release of details of a private binding ruling around the provision of nil interest loan to an SMSF by a related party.
Since 2007 SMSFs have been allowed to borrow to purchase assets using instalment warrant or limited recourse borrowing arrangements. There is no restriction on who the lender can be with these arrangements – so it is possible for a related party (including members of the SMSF) to lend money to their own SMSF, however the private ruling issued by the ATO recently is an extreme case.
You may have received a letter from the ATO entitled “Your participation in a franking credits arrangement” and wondering whether it applies to you and whether you need to do anything – such as amend your SMSF annual returns.
This letter has been prompted by the the previous Labor Government’s intention to close a loophole which enable an investor (via the assistance of their broker) to effectively obtain twice the amount of franking credits on the same parcel of shares.
A recent West Australian case (Ioppolo & Hesford V Conti 2013 WASC 389 has highlighted the importance of having a valid SMSF estate plan to ensure benefits held in an SMSF go to the intended beneficiaries.