SMSF
The CGT Retirement exemption – can you contribute real property ?
A new interpretative decision from the ATO has come out recently regarding the use of the retirement exemption to disregard the capital gains tax on the sale of active assets in a business, where the twist involves the in-specie contribution of a property to your SMSF to satisfy the retirement exemption requirements.
Firstly, lets just get our frame of reference. These are the facts of the situation that the ATO has used:
- It involves an individual taxpayer, who is less than 55 y.o.
- They have made a capital gain from the sale of an active asset.
- The individual is considering choosing the small business retirement exemption to disregard the capital gain.
Can an SMSF borrow for an off the plan development?
With the increasing awareness of the Superannuation borrowing provisions, and the perpetual interest in property from investors where gearing is concerned, a number of issues continue to be asked of the ATO in regards to specific circumstances.
A recent one involves off the plan (OTP) development. Specifically, the question was raised as to how the ATO views the purchase by a DIY superannuation fund of say, an OTP apartment such as a strata-titled apartment, under section 67A of SISA (the borrowing provisions).
Firstly by way of background, an OTP purchase will typically involve the SMSF signing a contract for the vendor to deliver a completed apartment at settlement. The vendor will then generally enter a contract with a builder to build the apartment and the purchaser merely enters the purchase contract for the completed apartment and land. However there may still be the need to sub-divide the title and build the apartment at the time of signing. Hence, settlement will often be delayed until a certificate of occupancy is issued for the apartment once it is completed and the building surveyor has signed-off that it complies with relevant planning, etc.
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Pension choices in your SMSF
If you’ve reached the point in the lifecycle of your SMSF where you have satisfied a condition of release (e.g. retirement), then the commencement of an income stream (aka pension) will be a key consideration.
Technically, SMSF income streams will fall into one of either two categories:
- Account based
- Non account based
Can a SMSF trustee take out Trauma Insurance for a member ?
Whilst taking out life insurance, or total and permanent disablement insurance for a member is a relatively straightforward issue for trustees of Self Managed Superannuation funds, the issue of Trauma insurance has always been a bit more complicated.
Firstly, there has been the question of whether or not taking out a Trauma Insurance policy would actually contravene the sole purpose test, and secondly, if a trauma policy is paid out then how does this interact with the condition of release provisions.
In April 2010, the ATO Commissioner released a SMSF Determination that cleared up their thinking on this issue. Specifically, the question was raised:
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How Self Managed Super Works
A Self Managed Super fund (otherwise known as a SMSF, or DIY Super fund) is a type of superannuation fund where you (and up to 3 other members of the fund) are also the trustee(s) of the Fund, and hence have complete control over its operation. With the increasing popularity of these funds, the purpose of this article is to provide prospective trustees with a simple overview of how DIY Superannuation works, and what’s involved.
So what is a Self Managed Super Fund ?
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