ClearLaw Articles

SMSF Trustees may be remunerated in some circumstances

Maddocks Financial Services Team — Tue, 31 Jan 2012 03:10:23 GMT

A proposed new law would allow SMSF trustees and directors of SMSF corporate trustees to be remunerated for non-trustee duties or services.

SMSF: Parents and guardians of minors who are SMSF members can soon be a director of the corporate trustee for that minor

Maddocks Financial Services Team — Tue, 31 Jan 2012 03:09:24 GMT

A proposed law due to go before Parliament in February 2012 would allow parents and guardians of minors who are SMSF members to be a director of the corporate trustee for that minor. If passed, the new law will apply from 8 October 1999.

'Resettlement' and continuity of 'trust estate' — update on the ATO's view after Commissioner of Taxation v Clark

Viviane Karoumbalis — Tue, 31 Jan 2012 03:08:16 GMT

The Australian Taxation Office (ATO) has confirmed that a change in trust circumstances, including a change in membership and trust property, does not necessarily create a new 'trust estate' or cause a 'resettlement' of the trust. Effectively, the proposition established in the High Court decision of FCT v Commercial Nominees Australia has been broadened to apply to unit trusts.

This article includes a link to a previous ClearLaw article that discusses Clark's case.

Changes to superannuation trustee covenants and obligations: Part 2 of 'Stronger Super'

Maddocks Superannuation Team — Tue, 31 Jan 2012 03:06:17 GMT

A law proposed as part of 'Stronger Super' will change the core obligations, and standards expected, of trustees and their directors of a 'registrable superannuation entity'. However, although the new law rearranges some sections relating to SMSF trustees, it doesn't materially affect core obligations of SMSF trustees or their directors.

The Bill[1] represents the second tranche of changes to implement the Government's Stronger Super reforms.

Superannuation Forecasts for members — Relief for trustees and ASIC's guide to what's allowed

Jeff Holowaychuk — Tue, 31 Jan 2012 03:05:19 GMT

In December 2011, the Australian Securities and Investments Commission released:

a new class order which relieves trustees of superannuation entities from having to hold an Australian financial services licence (with an 'advice' authorisation) in order to give members certain estimates about their retirement benefits; and
a Guide to clarify ASIC's views on how superannuation trustees may take advantage of the relief under the new class order and a previous class order relating to financial calculators.

The Guide also sets out ASIC's position on superannuation benefit calculators which allow members to predict their retirement benefits and how those benefits are affected if the member changes variables.

Although ASIC has made it easier for trustees to provide members with forecasts of their retirement benefits, trustees should take extra care to ensure that all ASIC's requirements are met.

Update — SMSF pensions and limited recourse borrowing: they are compatible, but be careful

Alastair Keith — Wed, 30 Nov 2011 03:59:17 GMT

In our June 2011 ClearLaw article 'Pensions and limited recourse SMSF borrowing: are they compatible?', we considered a possible tension between:

trustees using SMSF assets for limited recourse borrowing; and
the prohibition on the use of the capital and income of pensions as security for borrowings.

Now we have received non-binding advice from the Australian Taxation Office confirming that the prohibition is intended only to stop a member from using their pension entitlement as security for borrowing. That said, trustees should remain aware of the prohibition as a SMSF engaged in both paying a pension and a limited recourse borrowing arrangement needs to carefully manage those arrangements to ensure the SMSF complies with the law.

Boosting Australians' Superannuation Savings - Superannuation Guarantee (Administration) Amendment Bill 2011

Kate Hocking — Thu, 24 Nov 2011 04:59:03 GMT

It is increasingly apparent that many Australians do not have enough money in their superannuation to fund their retirement. This is particularly so for women, many of who have a break in their working life to have children. To address this, the Government has introduced a bill to increase the superannuation guarantee charge percentage and to remove the age limit on superannuation guarantee contributions. The Bill, the Superannuation Guarantee (Administration) Amendment Bill 2011 (Bill), was introduced into the House of Representatives on 2 November 2011.

Recent ATO rulings for SMSFs 2 of 2: a former same-sex partner of a member is a 'former spouse'

Alastair Keith — Thu, 24 Nov 2011 04:42:11 GMT

In another ruling, the ATO has confirmed that an individual is a 'former spouse'[1] of an SMSF member if that individual lived with the member on a genuine domestic basis as a couple, regardless of whether they are of the same sex or different sexes. That is so even if the relationship began before recent amendments to remove discrimination against same-sex couples.[2]

Recent ATO rulings for SMSFs 1 of 2: the child of a former husband or wife of a member is not a 'stepchild'

Alastair Keith — Thu, 24 Nov 2011 04:36:50 GMT

The ATO recently ruled that, for the purposes of being a 'stepchild' (and thus a 'dependant') under the regulations,[1] an individual is not a 'stepchild' of an SMSF member if the marriage of the individual's natural parent to the member ends before the death of the member. That is so regardless of whether the marriage ends due to divorce or the death of the individual's natural parent.[2]

MySuper Core Provisions: an overview of the new Bill

Stuart Jones, Thomson Reuters — Thu, 24 Nov 2011 04:30:01 GMT