Super for the self employed. If you’re self-employed and eligible to claim a deduction for personal contributions, our services include drafting the required Notice of Assessment to Claim & Acknowledgement Receipt.
This short video will show you how it works.
Video courtesy of the ATO
What happens if you go over the super contributions caps?
Making contributions over the super caps has specific consequences depending on your age and the type of contribution you make.
This short video will outline those consequences.
Courtesy of the ATO
Receiving Scam Emails, SMS or Phone Calls ? Whether at work or at home, receiving fraudulent emails or calls intended to scare us into updating personal details seems to be a regular occurrence. At times the deception is easy to spot, especially in cases where your financial information is requested. Where there is uncertainty, the ATO have released steps to assist us on verifying or reporting a scam.
SuperStream for Employers
The SuperStream standard was introduced on the 1st of July 2014.
It’s a new way for all employers to make super contributions electronically.
SuperStream simplifies how contributions are made, providing a new electronic standard for sending linked data and payments.
This means a more efficient super system, and an easier experience for you as an employer.
There are SuperStream solutions available to best suit your business needs so you should assess your options now.
You can also get professional assistance by talking to your accountant, business advisor or bookkeeper.
When you have decided which option is best for your business, set a target date in cooperation with your service provider.
SuperStream starts for medium and large employers from July 2014.
Providing you are making a genuine attempt to get ready, you have until the end of June 2015 to implement the changes.
If you leave it later, you run the risk of getting caught short.
For small employers, SuperStream starts in July 2015, and if you’re making genuine efforts to get ready you have until the end of June 2016.
Start early to realise the benefits of SuperStream sooner.
Preparing for SuperStream will take time so it is important to start preparing now.
You may need to collect some new information to make SuperStream contributions using SuperStream.
Once you’ve collected the new information, you’ll need to update your payroll records.
If you use payroll software, look for an update that is SuperStream ready.
If you are not already connected, you will need to arrange an online connection with your service provider or default fund.
Now you are almost ready to start, but you might want to undertake a trial first.
Once you have completed the simple steps you have just seen, you should be ready to make your first SuperStream contributions.
For more information on how to prepare your business for SuperStream, including a simple to follow checklist, visit ato.gov.au/superstreamchecklist or talk to your service provider.
The above extract was obtained from the ATO Website.
Paying too much in SMSF Fees ?
Our fees are fixed and easy to understand so you will know up front how much it will cost for the Annual Administration of your fund.
Funds with members that are solely in accumulation mode pay only $950-pa while funds with one or more members in pension mode pay $1,210-pa. The independent audit is charged separately and is $395-pa
At Green Frog Super there’s no restriction on the type of bank account you can have, which broker you use or how many transactions you can make, this means you do not have to worry about what constitutes a transaction or how many share investments you have and how that affects your fee.
Some companies offer an attractive looking administration rate in order to get you interested, only to add extra fees and charges if you make more than a set number of transactions, or any number of other small print items, so don’t get caught out paying too much in smsf fees.
All of our work is conducted in Australia and we directly control, train and supervise everyone involved in the processing of your fund. By using technology and giving clients access to our secure client portal, we service all of Australia from our Brisbane office.
Free ATO webinars for Self-Managed Super Fund trustees
If you are thinking about setting up a self-managed super fund (SMSF) or would like to know what is involved in running an SMSF, the ATO offers a variety of free webinars to provide trustees with an overview of their role and responsibilities.
Click above to visit the ATO Video site
Thinking of Borrowing Money in Your SMSF to Buy a Property?
Have a Game Plan and Assemble a Good Team
Having a self managed super fund does not mean that you have to handle all aspects of its management yourself. If you’re thinking of borrowing money in your SMSF to buy a property, there are many things to consider and you need to make sure you get it right. Getting it wrong can have harsh consequences when a superannuation fund is involved.
Finding the right professionals can help to ensure that everything happens the way it should. Here is a good team to consider:
Financial Advisor – Seeking financial advice that is particular to your circumstances is a good first step in deciding whether or not this investment is suitable. Before settling on a loan, nearly all of the SMSF lenders will require you to provide a Financial Advice Certificate that has been signed by a licensed financial advisor. Many trustees get caught out by this requirement and have to find someone at very short notice. Getting financial advice before the process commences not only assists with obtaining this certificate, but also helps to ensure that the decision is made with as much knowledge as possible.
Administrator/Accountant – Green Frog Super can help you to establish the correct structure for the purchase and advise you of the taxation and compliance issues to be aware of. If you already have an SMSF your deed may also need to be upgraded so that it adequately caters for borrowing within the fund. If your existing fund has individual trustees there are a number of reasons why you may need to consider changing to a corporate trustee before a property is purchased. Green Frog Super will gladly assist you with these issues.
SMSF Lending Broker – Utilising the services of a loan broker can help to reduce the amount of time you need to spend researching the various loans as well as submitting and following up the loan application. The loan process is longer and more involved with an SMSF loan so getting pre-approval before you find a property can potentially put you in a better negotiating position as well as help to avoid missing critical contract dates associated with the finance. The lending broker will be able to give some guidance about the likely amount of time needed for finance approval and settlement which you may want to consider before completing that section of the purchase contract.
Solicitor – As with any property purchase, the assistance of a solicitor and/or conveyancer is important to make sure that your interests are protected. This is especially important with an SMSF property purchase when lending is involved. Not only does the contract need to be entered into by the correct entity, but the timing of the signing of the property contract and the bare trust document is important for future stamp duty purposes. The rules vary between the states and is something that you’ll want to get right so that stamp duty does not apply at a later date when the property is transferred from the bare trust’s trustee to the super fund‘s trustee. Some lenders will also require a Legal Advice Certificate to be signed which demonstrates that you have been made aware of the terms and consequences of the loan especially in relation to the personal guarantees that you will most likely be asked to make.
For some general information that may be of assistance when deciding whether borrowing to buy property in an SMSF is suitable, the following links may be useful:
If you do decide that borrowing to buy property in an SMSF is suitable for you then having experienced professionals assist with the process will help to make the transaction as seamless as possible.
Disclaimer: This information in general in nature and does not constitute financial advice. In providing this information no recommendations are made as to whether the acquisition of an investment under a limited recourse borrowing arrangement is or is not a suitable investment for any particular superannuation fund. We strongly recommend that trustees or potential trustees of super funds should obtain independent legal and financial advice that considers your personal circumstances before making any investment decisions related to this information.
What Is SuperStream?
SuperStream is the name that has been given to reforms that are aimed at enhancing the efficiency of some superannuation transactions and improving the quality of data in the system. It includes changes to the way in which rollovers are processed and the way contributions are made. Most of the changes only affect large funds; not self managed super funds, but there are some aspects that SMSFs must also be concerned with.
How It Will Affect Your SMSF?
From 1 July 2014 businesses with 20 or more employees must make their employee super contributions electronically with the member information provided in a particular format. It will apply to all businesses from 1 July 2015. This does not merely mean that the contributions are directly deposited into the fund’s bank account. SuperStream requires superannuation funds to provide their ABN, bank account details and electronic service address to the employer. The employer must then pay the superannuation contributions using the data and e-commerce standards of SuperStream. It is the electronic service address that will receive the data messages about the contributions and is more than just an email address. The trustees of SMSFs will need to make sure that they have the right things in place before 1 July 2014 if they are to receive employer contributions from businesses affected by the change.
Are There Any Exceptions?
As with most rules there are typically exceptions. The exception in this case applies to SMSFs that are considered related parties of the employer. If the fund is only receiving contributions from a related employer then they will not be subject to the new standards.
What Do Trustees Need To Do?
Clients of Green Frog Super do not need to do anything. We will be contacting our clients in the lead up to 1 July, registering any that must adhere to the new standard and providing the information that the member must give to their employer. There will be no additional fees for this service. For trustees whose accountant or administrator does not offer this service they will need to engage an external service provider if the new standards apply to them. The ATO will publish a list of eligible providers on their website. Australia Post is one of the providers that will be offering the service and details can be found here http://auspost.com.au/business-solutions/self-managed-super-fund.html
45 Day Holding Rule for Franking or Imputation Credits – SMSF
What are Franking Credits (also known as Imputation Credits) and Why Are They Useful?
When an Australian company pays tax on its earnings and then later distributes those earnings to its shareholders as a franked dividend, a ‘tax credit’ is passed on to the investor. This tax credit is known as a franking credit or imputation credit. Many Self Managed Super Funds (SMSFs) hold investments in Australian shares which pay franked dividends and these credits help to effectively manage the SMSF’s tax liability. They do this because credits can be used to reduce the amount of tax payable on other income or be refunded when the tax return is lodged if the credits are greater than the amount of tax payable.
This is especially useful in an SMSF because of the 15% tax rate that applies to investment income in accumulation phase and 0% in pension phase compared to the 30% rate that companies pay.
The following examples will help to illustrate:
The XYZ Super Fund earns $2,100 in fully franked dividends and $1,000 in interest income during the year with no other transactions. The table below illustrates what its taxable position would look like if the fund were fully in accumulation phase and fully in pension phase and excludes the ATO’s Supervisory Levy:
As you can see from the examples, the franking credits were sufficient to not only pay all of the tax for the fund in accumulation phase but have $300.00 excess that was refundable while the full amount of the franking credits of $900.00 were refundable for the fund in pension phase.
Are all dividends from Australian companies fully franked and is the SMSF always entitled to those credits?
No, not all Australian companies pay franked dividends and not all that do are 100% fully franked. The SMSF is generally entitled to those credits as long as it meets the 45 day holding rule.
What is the 45 Day Holding Rule and When Does It Start and Stop?
In practical terms it means that the super fund must hold the shares for at least 45 days (90 days for some Preference shares) in order to be eligible to claim the franking credits against its tax liability.
The 45 days doesn’t include the day of acquisition or date of disposal so it is effectively 47 days. The acquisition and disposal dates are the dates the buy and sell contracts were entered into; not the settlement dates which generally occur 3 days later.
If the 45 day holding rule is not met the franked amount of the dividend is still included in taxable income and the franking credits are disregarded.
For the purposes of the holding period rule, the ‘last in, first out’ method is used to determine if the rule has been met. The following example is taken from the ATO website:
EXAMPLE 7: Substantially identical shares
Jessica has held 10,000 shares in Mimosa Pty Ltd for 12 months. She purchased an additional 4,000 shares in Mimosa Pty Ltd 10 days before they became ex-dividend (the day after the last day on which acquisition of the shares will entitle you to receive a dividend) and then sold 4,000 shares 20 days after Mimosa Pty Ltd shares became ex-dividend. Her total franking credit entitlement for the income year was more than $5,000. The shares she sold are deemed to have been held for less than 45 days, based on the last in first out method. Jessica would not be entitled to the franking credits on the 4,000 shares sold.
Individuals are given an exemption from this rule if the total amount of their imputation credits for the financial year is less than $5,000, but unfortunately SMSFs are not eligible for this exemption.
Disclaimer:The information is general in nature and for information purposes only. It does not take into consideration your personal circumstances or other information that may be relevant. It should not be considered as or relied upon as financial advice. You should seek financial advice from a qualified professional before making any financial or investment decisions in relation to this information.
ASIC Sounds New Warning on SMSF Spruikers
Article is courtesy of The SMSF Advisor 22nd Oct 2013
The corporate regulator has issued a warning about SMSF spruikers who are encouraging consumers to invest in residential property via the National Rental Affordability Scheme (NRAS).
“ASIC is aware that a number of SMSF promoters include misleading statements in their ads about the grants that may be available under NRAS,” said the regulator.
The NRAS offers property investors direct payments and tax offsets for building and leasing to moderate income earners at a rate that is 20 per cent below market value.
“ASIC has seen ads stating that consumers can use their superannuation to purchase a property using the scheme and receive ‘$100,000 tax free’,” said the statement.
The regulator said the advertisements do not provide balanced messages about the “features, benefits and risks” of investing in an NRAS property via an SMSF.
