Insyt director Darren Wynen said that investment segregation can be a useful strategy for SMSFs that can achieve some savings.
“The idea is to segregate high-growth assets into pension phase for accounting purposes. As we know, the increase in value doesn’t count towards the transfer balance account,” Mr Wynen explained.
“The theory is that, over time, the taxable proportion as determined by the actuary will decrease as those assets grow in value.”
The ATO has given this strategy the green light, he said, as it’s allowed under the regulations.
“We’re not segregating for tax, the segregation is happening on the accounting level, not the tax level, but over the years, it will have an impact on what the actuary determines the proportion to be,” Mr Wynen said.
