The SMSF Professionals’ Association of Australia (SPAA) has welcomed the move by ASIC to clarify the working of the wholesale investor test and how it relates to SMSF professionals and trustees.
SPAA chief executive Andrea Slattery said ASIC’s previous position, as expressed in QFS 150, created uncertainty as to when the wholesale client test applied to an SMSF trustee receiving advice on a financial product.
“SPAA strongly believed that the requirement that an SMSF had to hold $10 million of net assets was an incorrect interpretation when the advice was relevant to an investment being made by an SMSF trustee,” Ms Slattery said.
The clarification, which was issued last week, allows SMSF trustees to be treated as wholesale clients where they have net assets of at least $2.5 million, or income of $250,000 a year for the past two financial years, or where the relevant investment is worth a minimum $500,000, Ms Slattery noted.
However, SPAA believes there is still uncertainty about how the $2.5 million asset test applies to SMSF trustees, she added.
“ASIC’s statement says that the threshold applies ‘if the trustee has net assets of at least $2.5 million’. We need clarification from ASIC whether this means only assets in the SMSF, the member’s balance in the SMSF, and also includes the trustees’ personal assets outside superannuation,” Ms Slattery said.
“The interpretation of this issue is fundamental to how the wholesale investor test functions, not only to trustees but to the accountants that issue certificates stating that an investor meets the wholesale investor test thresholds.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 22 Sep 2017ASIC permanently bans SMSF property spruikerBy Miranda Brownlee
- 22 Sep 2017Male SMSF investors ‘bigger risk takers’, says reportBy Staff Reporter
- 22 Sep 2017Lawyer flags subdivision trap with downsizer contributionsBy Miranda Brownlee
- 22 Sep 2017ATO urged to address ‘unknowns’ with LRBA reportingBy Miranda Brownlee
- 21 Sep 2017Lost and unclaimed super climbs to $18 billionBy Lara Bullock
- 21 Sep 2017ATO to release further guidance on reservesBy Miranda Brownlee
- view all
- Male SMSF investors ‘bigger risk takers’, says report
Male SMSF members tend to hold a greater share of assets in higher risk investments including domestic shares and property in comparison to ...read more
- Lawyer flags subdivision trap with downsizer contributions
SMSF trustees planning to make downsizer contributions have been warned that if a property has been subject to a partial sale in the 10 yea...read more
- ATO urged to address ‘unknowns’ with LRBA reporting
The ATO has been asked to provide further clarity around the events based reporting requirements for LRBA repayments, with the new requireme...read more
- view all