IN THIS EDITION
SMSF Trustees will now
need to regularly review their
Fund’s Investment Strategy
New Regulations for SMSFs
Investing in Collectables and
Personal Use Assets
Changes to Supervisory
Levy
_____________
2012/2013
Concessional
Contribution Limits
The concessional (tax
deductible) contribution
limits for the 2012/2013
financial year are as follows:
50 year and over $25,000
Under 50 years
$25,000
Please note the reduction
for over 50s.
2012/2013 Minimum
Pensions
The minimum and
maximum pension draw
downs for the 30 June 2013
financial year are as follows:
Under 65
65-74
75-79
80-84
85 – 89
90-94
Over 95
3%
3.75%
4.50%
5.25%
6.75%
8.25%
10.50%
SMSF Trustees will now need
to regularly review their
Fund’s Investment Strategy
In August 2012 amendments were
made to the investment strategy
requirements in the Superannuation
Industry (Supervision) Regulations.
There are two key changes
commencing from the 2012-2013
year:
• Trustees of SMSFs are
required to consider, as part
of their investment strategy
whether the fund should
hold a contract of insurance
that provides insurance
cover for one or more
members of the fund; and
• Trustees are required to
regularly
review
their
investment
strategy.
Previously it was only a
requirement to formulate
and give effect to an
investment strategy.
Consider Insurance
Members
Cover
for
and salary continuance (income
protection) cover.
The fund strategy would at least
need to confirm that the trustees are
aware and have considered the
insurance obligation and also why
they have determined that insurance
cover is or is not required.
Regular Review
Strategy
of
Investment
The second amendment is the need
to “regularly review” the investment
strategy. The term regularly is not
defined.
In the past most trustees would only
review their investment strategy on
an ad hoc basis. We would expect
that to comply with the regularity
provision trustees would need to
review their investment strategy at
least on an annual basis.
A review does not necessarily mean
a change in the current investment
strategy. However trustees would at
least need to document that a
review has been undertaken and
that the trustees consider that the
existing investment strategy is still
appropriate.
The new requirement does not
specify the type of insurance cover a
member should have. It is also not
an obligation to have cover but
trustees need to give consideration What action do you need to Take?
to the requirement.
As part of our end of year
Trustees would need to assess the administration service we will
applicability of different types of prepare an annual investment
cover available including: Death only strategy review minute to satisfy
cover, death and total and your fund’s legislative and
permanent disablement cover,
Compliance obligations. However
please note that this is a
documentary service only and is
not a substitute for investment
advice. If the trustees believe that
investment advice is required they
should obtain this advice from a
licensed financial advisor.
If you believe your super fund
needs to take out insurance cover
on behalf of members it would be
prudent to speak with a personal
insurance broker who can
recommend the appropriate type
and level of cover and assist you
with taking out the recommended
policies.
assets in order.
What are collectables
personal use items:
•
and
Trustees must make a
written record of their
reasons for deciding
where to store their
collectables and must
retain this for 10 years.
Trustees must insure their
collectables and personal
use assets in the name of
the SMSF within 7 days of
acquisition.
If the ownership of any
collectable is transferred
to a related party of the
fund, the purchaser is to
pay market value which is
to be determined by an
independent valuer.
There is an extensive list of items
which come under the new rules,
•
including:
• Artwork
• Jewellery
• Motor Vehicles
•
• Wine and Spirits
• Coins
• Antiques
• Artefacts
• Recreational Boats
• Books and Manuscripts
• Memorabilia
• Memberships of sporting
Who is a related party of the
or social clubs.
fund?
Should you require assistance with
a referral to a financial advisor or
personal insurance broker please
What are the new rules?
do not hesitate to contact our
office.
These rules do not replace or
supersede any existing legislative
New Regulations for SMSFs requirements. Existing super laws
Investing in Collectables and about in-house assets, sole
purpose test and use of assets by
Personal Use Assets
related parties continue to apply.
The government has questioned
the appropriateness of SMSFs However in addition the following
investing in collectables and regulations must now be adhered
personal use assets. Rather than to:
• Collectables and personal
banning investments in these
use assets cannot be
assets
all
together,
the
leased to any related
government has prescribed a set
party of the SMSF.
of rules which SMSF trustees must
adhere to if they wish to make
• Collectables and personal
such investments.
The new
use assets cannot be
regulations
apply
to
all
stored or displayed in a
investments purchased after 1
related party’s private
July 2011.
residence.
• Collectables and personal
If
your
SMSF
purchased
use assets cannot be used
investments prior to this date, you
by any related party of
have until 1 July 2016 to get your
the fund.
A related party of the SMSF
includes the members of the fund
and any other entities that the
members may control. Relatives
of fund members are also included
as related parties e.g. Brothers,
sisters, parents, grandparents,
uncles, aunts and adopted
children.
Should you require any further
details about the new collectable
and personal asset rules please
contact our office.
Changes to Supervisory Levy
For the 2012-2013 year the
Supervisory Levy will decrease to
$191. From 2013-14 the levy will
increase to $259.
The information in this newsletter is general
commentary only and should not be considered
to be advice.