Chloe talks about crunching down before the May deadlines, what to watch out for and steps you should be taking for EOFY preparation.
When you buy an investment property, it’s assumed that all costs associated with the property will be a tax deduction, unfortunately, this is not always true.
An expense is deductible when it is incurred and to the extent that it relates to producing assessable income. Some of these expenses may include:
- Advertising for tenants
- Utilities & Taxes
- Loan Interest
- Agents’ Commissions
All of the above are common rental property expenses incurred in relation to rental income received.
Data feeds are something that you have most likely heard us talk about for quite some time. These third party authorities have a huge impact on how we look after you and your fund and the level of accuracy and efficiency we can deliver.
Probably the most important misconception is that when you sign a third party authority form, we have “access” to your account or we can transact on the account on your behalf. This is absolutely incorrect – to confirm:
A third party authority does not provide us with the ability to conduct any transactions on your behalf or access to login to your accounts.
Whilst there haven’t been any major tax reforms within Super for quite some time, the landscape has definitely shifted in terms of compliance and issues surrounding advice.
So what changes are coming into effect this year?
- Abolishment of the Accountants Exemption
This is probably one of the biggest changes to disrupt the financial services industry. One of the few legitimate exemptions that currently applies to accountants is the ability for them to recommend the establishment, or wind-up, of an SMSF. This exemption will be removed from 1 July 2016 meaning that an accountant or SMSF administrator cannot provide this advice. Superfund Partners is an SMSF administration and advice business – these changes will have minimal impact on us and our clients.
The real change that existing SMSF trustees will notice will be that the (unlicensed) accountants they work with will become very wary and cautious of what advice and information they provide.
ASX listed equities are statistically the most common asset in an SMSF and this is reflected in the hundreds of SMSF accounts I review each year. A common question I ask my clients is “do you have an adviser or a broker?”
I get mixed answers to this question. Some brokers call themselves advisers but only provide investment advice, occasionally investment research or IPO access and execute trades. Some brokers act purely on an ‘execution only’ basis – they solely action share trades on behalf of trustees.
My point is that these traditional style brokers have their place, but they are very different to a financial adviser that provides broad advice across your overall financial life. This means that sometimes you can miss out on key strategic advice or truly getting the right advice that suits your needs because your ‘adviser’ is purely focussed on your investments – not you as a person!
In the day to day administration of our client’s super funds we sometimes have to ask trustees questions in relation to structure,
Collectibles and changes from 1 July 2016
Does your SMSF own artwork, jewellery, coins, vintage cars, wine collections or antiques to name a few of the major items deemed collectibles? If these items were purchased before 1 July 2011 you might not be aware that significant changes are taking effect from 1 July 2016.
From 1 July 2016, any collectible owned by an SMSF must adhere to the new rules:
- The collectibles are not to be stored at the SMSF trustees residence;
- SMSF trustee or a related party is not permitted to lease or use any of the collectibles;
- The collectible MUST be insured by its’ own separate policy;
- Document and minute the storage decision by the trustees;
- If the collectible is to be sold to an SMSF trustee or related party then a valuation by a qualified independent valuer must be sought to determine the market value.
With the amount of changes to superannuation in the last five years it’s essential that your SMSF has a robust, good quality trust deed.
Although the rate of actual law changes has slowed in the last few years, there have still been numerous rulings, cases and new strategies developed which require an up to date SMSF trust deed to protect your interests and get the most from your SMSF.
The following six items are example areas where your current SMSF trust deed is likely deficient:
For many people their SMSF will make up the largest part of their wealth as they move into their later years. This means just as much effort needs to be invested when it comes to ensuring SMSF assets go to who you want them to on death as other personally owned or business assets. This Gold Coast workshop will educate SMSF trustees on how to best structure their assets to ensure your wishes are carried out in the most tax effective way on your passing.
SMSF Gold Coast Workshop Content
In this workshop we will cover:
- Components of a solid SMSF estate plan
- Your personal Will does not cover your SMSF!
- Tax on death and how to avoid it
- Maximising the legacy you leave for your family
- How to avoid estate disputes
- Choosing the right executors
- Dealing with blended families
- Should your Will include provisions for a testamentary trust?