Recently, our TAG Superannuation Strategies Seminar wrapped up, and we thank all of you who attended both in person and virtually.
Each year, we receive lots of really interesting and relevant questions from our attendees.
Here is PART 1 of some great SMSF questions (and answers from our super experts).
1. Can you start a TRIS using a balance above the Transfer Balance Cap (TBC) – for example $5M?
Yes. A TRIS is in the accumulation phase and is therefore not subject to the TBC. Thus, resulting in having no limits to its starting balance. ECPI is not claimable either. Once the member satisfies a condition of release with no cashing restrictions (i.e. they turn 65 or retire) then will need to adjust the pension to comply with the TBC as it has converted to the retirement phase. TBAR reporting and appropriate documentation is then required.
2. Can an SMSF buy an investment property currently owned by the member through LRBA?
Yes, provided it is a commercial property, given the transaction needs to be for an acquirable asset from a related party.
3. A SMSF has an LRBA on a rental property. Can you please confirm if the superannuation fund can have a redraw on the loan? Is there any case or section to confirm this is ok?
Redraw is not available as it is viewed as an additional loan. There can be an offset account however, without issue.
4. In Victoria, is there a specific order to set up the bare trust? Such as only to set up the bare trust after the contract is signed and before the settlement.
There is no requirement in Victoria for these entities to be in existence prior to purchase (signing a contract)- but the contract cannot be signed by something that does not exist – so utilising the and/or nominee provision, you would then need the bare trust (and bare trustee) in place before the nomination is made.
5. How do trustee accountants charge for services to their fund? I was under the impression that trustees were not allowed to charge the fund.
You would not be charging the fund in your trustee capacity. As you use the skills in which you are qualified for, use your tax agent licence, software etc, then you now need to charge your fund a commercial rate for the accounts and tax return lodgement.
6. To avoid NALE on accountant fees, can we just charge a fee from our accounting practice?
Yes, that is correct. The fee being charged should be consistent with a firmwide policy for staff as the best solution to show its arm’s length.
7. What if I do my own SMSF accounts after hours and not using the company software? Do I still need to charge a fee each year?
I would assume the Fund is paying for the software itself. If so, in this instance you would be acting in your trustee capacity. It would be prudent to document and minute this to have on file for the auditor.
If you have any questions, please contact us on 03 9886 0800 or via email.
Stay tuned for part 2 super seminar questions in the coming weeks!
TAG Superannuation Strategies Seminar – watch now on demand
If you want to hear more about any of these topics, we delve into the client strategies options in our on-demand Superannuation Strategies Seminar.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2023. Please do not reproduce without the expressed written consent of the author.