The draft ruling, released for public comment, will prevent SMSFs that are partly in the pension phase and partly in the accumulation phase from holding a property.
The same will also apply to bank accounts, according to AMP SMSF head of policy and technical, Peter Burgess.
This determination is slated to take effect on 1 July 2014, meaning some SMSFs will have to restructure their investments before that date to ensure assets owned by the fund are either entirely in the pension phase or entirely in the accumulation phase.
This will be particularly problematic if the relevant asset is a property, Mr Burgess said.
The measure is to prevent members from transferring assets to the pension phase and then selling the asset shortly afterwards to avoid CGT.
If an asset is “purported to be segregated shortly before disposal” then disposed of in circumstances where a capital gain is claimed to be exempt income, there will be a question over whether it was invested for the sole purpose of helping the fund discharge its liabilities concerning super income stream benefits, the ruling stated.
The ruling also indicated that tax avoidance provisions will apply if an asset is segregated shortly before it is disposed of.
Mr Burgess noted the determination does not define “shortly”.
the rules just get crazier.
So now if I have 4 members, each with an accumulation and pension account, and i want bank accounts with 4 banks and their required offset account then
hence we need 4 x 2x (4×2)
= 64 different bank accounts!!!!!!!!!????
Note that some banks refuse to open more than 1 bank account per smsf fund.
So what happens then???
Also what happens if you actualy only have 1 smsf acount but you dont have an actuarial certificate but the auditor passes the tax return???
are we in trouble and if so what are the penalties?
In the words of Kerry Packer
[quote]I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn’t minimize their tax they want their heads read because as a government I can tell you you’re not spending it that well that we should be donating extra. [/quote]
Of course people are going to sell assets after establishing pensions if they have any intelligence at all.
I agree with Meg, this article is a little bit misleading as tax ruling was only about segreated pension funds, and this is not a common structure in SMSFs
Actually I don’t think this will prevent them from holding property – it will just mean that they can’t treat the property as “segregated”. They will have to claim a tax exemption using the actuarial certificate method instead.