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1. Eight smart borrowing strategies for SMSFs

The Cooper superannuation review's warning in its final report that borrowing to invest should not become the "core focus" of self-managed super funds should act as a trigger for many fund trustees to review their practices. And fund trustees who are considering gearing investments for the first time should move with part...

2. Five strategies for SMSFs investing in geared property

SME owners should now have more confidence about arranging for their self-managed super funds to borrow to acquire their business premises and other investment properties – provided the assets measure up as quality investments. This follows the recent release of a self-managed super fund final ruling prov...

3. The pros and cons of a SMSF

Do you think you could have beaten the negative returns that the vast majority of heavyweight super funds recorded over the past year? If your answer is a resounding “yes”, you are far from alone.   Recep Peker, a senior analyst with specialist researcher Investment Trends, says his firm’s research shows that when mar...

4. DIY super funds get new rules for valuing assets

Superannuation regulations, specifically the Superannuation Industry (Supervision) Regulations, have been amended, with effect from August 7, 2012, to require trustees of self-managed super funds (SMSFs) to value the assets of the fund at "market value" for reporting purposes. The amendments also require trustees to: consi...

5. Why borrowing through your SMSF to buy property makes more s

Suddenly, borrowing to invest in direct property through self-managed super funds is much more appealing. Following the recent release of a SMSF draft ruling, countless fund trustees would be feeling more confidence in the strategy – particularly when investing in older properties. In the draft ruling, the ATO explains in detail its interpretation of the SMSF borrowing laws i...

6. SMEs and super: ATO’s latest warning shots

A few stats on super might surprise people: For the 2009-10 year, $72 billion in employer contributions were received by super funds. If compulsory super goes to 12%, that amount can only grow. Total estimated superannuation assets are around $1.28 trillion (and growin...

7. Tax time 2012: Best year-end strategies for SME owners

Astute SME owners will carefully coordinate their personal and business end-of-year tax strategies to make the most of changing tax-saving opportunities and to sidestep a range of looming tax traps. From a personal perspective, there are compelling reasons for many super fund members to maximise their concessional contributions before July. Howev...

8. Door opens on DIY super borrowing

Investing in property within a DIY super fund is now a lot easier, if you don’t mind gearing and buying packaged products. Note that I used the word “easier” rather than “simpler”. In September 2007, new laws came into effect that permit DIY funds (or self-managed super funds, SMSFs) to invest in an instalment warrant issued over any asset that an SMSF can invest in directly. For example, a product provider may offer an instalment warrant over property, Australian shares...

9. Six lessons from Australia’s richest self-managed super fu

The latest federal budget has focused attention on Australia’s best-paid super fund members – an estimated 128,000 individuals who earn more than $300,000 a year from their employment, businesses and non-super investments. Under a controversial budget measure – which could cost as much to administer as the extra tax it wil...

10. Why you shouldn’t borrow from a self-managed super fund

Many small businesses are currently doing it tough. Finance, including credit, has become more difficult to obtain, and trading conditions are often just plain difficult. So, where to turn for help? One source can be the self-managed super fund (SMSF) of one or both of the business owners. But, there are grave traps in this potentially lucrative source o...

11. 15 expert tax tips

It's that time of year again. Businesses across the country are dragging out boxes of receipts, log books and forms to make the most of tax time and avoid being slugged with a hefty bill. Australian businesses are beginning to emerge from the downturn, but SMEs know they need every dollar they can get. The tough times aren't over, and mo...

12. SMSFs: saviour or problem?

The number of self-managed super funds (SMSFs or more commonly known as DIY funds) continues to grow. As at June 30 this year, there were over 410,000 of them holding over $300 billion in assets. The global financial crisis and the losses it generated for super fund investments has possibly caused many to look into and indeed, start up, a self-managed super fun...

13. ATO REVEALS 2012-13 TARGETS: Less audits but still a crackdo

The Australian Tax Office's 2012/13 compliance program, which was published this morning, reveals an increased emphasis on sophisticated data matching techniques in its pursuit of individual tax payers and a focus on expense claims. On its radar this year for individuals are incorrect or fraudulent refunds for over-claims and deliberate fraud; work-related expenses for occupations with hig...

14. Review your DIY super investment strategy – here’s what

A worthwhile new financial year resolution is to review your DIY super fund’s investment strategy. And in this current climate, with regulators focusing on the governance of self-managed super funds, following the letter of the law is an excellent risk-maIn June last year, I reported that the large super funds were starting to shift some of their money away from Australian shares and into assets with lower risk. I noted that even if the large funds didn’t get their timing exac...

15. Death, divorce and taxes: Self managed super funds have to f

Just because the law allows investors to do something doesn’t, of course, mean it is a good idea. This investment adage comes to mind with the recent final ruling from the tax office – in its role as regulator of self-managed super – relating to the acquisition, maintenance and improvement of geared properties in a self-managed super ...

16. Avoid the seven sins of new SMSFs

Self-managed super funds (SMSFs) are still opening at the rate of 2,200-plus a month, as the sector truly consolidates its position as the most popular form of superannuation. Total fund numbers have reached almost 450,000 – a jump of 65% over the past seven years. However, the burgeoning SMSF numbers inevitably mean tha...

17. Cases show breaching superannuation rules can be costly

A superannuation flavour this week. The growth of superannuation is now well documented, but with that comes a warning about complying with the rules that govern super. And there are, as we all know, plenty of them! I've picked out three recent decisions, one by the Federal Court and two by the Adminis...

18. ATO warns self-managed super funds on loans made through tru

The Australian Taxation Office has warned thousands of self-managed superannuation funds it will be carefully watching to make sure members aren't distributing funds to themselves or relatives via investments by the super fund in trusts. The ATO warns members they could be breaking tax regulations by distributing funds via these methods and as a result, must be vigilant in ensuring they do not break laws unnecessarily. The ATO says most members using this type of method set up a ...

19. SMSF crackdown: Seven key messages for trustees

The net is tightening on trustees of self-managed super funds (SMSFs) who commit serious and not-so-serious breaches of superannuation law. With little fanfare, the Federal Government has just released draft legislation for a finely-targeted penalty regime that should significantly increase the ability of the tax office...

20. Self-managed super fund experts say Cooper review changes wi

Self-managed superannuation experts say a number of suggestions in the Cooper Review are likely to introduce new regulatory burdens for entrepreneurs who use SMSFs, leading to an increase in compliance costs. And while the industry has praised the review's approval of the current state of DIY super, many say a number of "improvements" are, in some cases, redundant. Dan Butler, director of DBA Lawyers, says there are two major issues that could increase costs for funds. Th...

21. Self-managed super in the ATO's sights

While Jeremy Cooper might be powering along with his review of the superannuation system (his report is due by June 30, 2010), the ATO continues to flag concerns it has regarding the operation of self-managed super funds (SMSFs). And with over 400,000 of them in existence, holding more than $370 billion in assets, a lot of people are in the ATO's...

22. Relief for DIY super funds: Off-market transfers ban delayed

The Federal Government has deferred its proposed off-market transfers ban between self managed super funds and related parties until July 1, 2013. The ban was to come into effect on July 1 this year but, according to the Federal Treasury website, the proposed ban is now planned to take effect from July 1 next year. The delay has been welcomed by the SMSF Professionals' Association of Australia, as technical director Peter Burgess told SmartCompany the deferred start...

23. DIY super: Tread carefully over sole purpose test

The sole purpose test for self-managed super funds means just that – sole purpose. The consequences can be dire. By TERRY HAYES of Thomson Legal & Regulatory. By Terry Hayes   The tax o...

24. DIY super funds: Get ready for more regulation

The regulation of self-managed super funds (DIY funds) shows no signs of easing. Given their importance in terms of the total superannuation sector, perhaps that is not surprising. But regulation changes may catch some DIY fund trustees out if they are not aware of what's coming. Most recently, the Federal Government has released ...

25. Warning about "SMSF-like" funds and DIY super funds under-cl

The Self Managed Super Fund Professionals' Association of Australia has issued a warning about the limitations of "SMSF-like" funds and also says some SMSFs are under-claiming valuable tax deductions. At the SPAA's annual technical conference at Melbourne's Docklands yesterday, SPAA technical director Peter Burgess told SmartCompany retail funds and industry funds coming out with "SMSF like" offerings is positive because it offers more flexibility for their members.

26. Self-managed super funds on notice

Self-managed superannuation funds (SMSFs), often referred to as DIY super funds, have grown rapidly in recent years. They give fund owners increased control over what happens to their superannuation, but there are a myriad of laws and regulations to comply with. As I mentioned last year, the key regulator of the sector, the T...

27. ASIC cracks down on SMSF risk and wants all investors to sig

Investors in self-managed superannuation funds should be required to sign a written agreement acknowledging a warning that their funds would not be compensated for theft or fraud, the Australian Securities and Investment Commission told a Senate estimates committee last night. The Australian Financial Review reported that the head of ASIC said the corporate watchdog would ask the Federal Government to introduce requirements that would force investors to sign a written acknowl...

28. DIY super funds and marital disharmony

Happy New Year to all SmartCompany readers!   My first column for this year is on a topic that we're bound to hear plenty about in the year ahead – self-managed (or DIY) superannuation. The rapid growth of self-managed super funds (SMSFs) and upcoming changes to superannuation – suc...

29. Why SME owners should invest inside and outside super

The Federal Government introduced two measures from the beginning of the new financial year that truly highlight why SME owners should think twice about holding all of their personal investments in a self-managed super fund – or any type of super fund. By cutting the annual concessional superannuation contribution...

30. DIY super funds cash dilemma

Cashed-up DIY super funds are in a dilemma. Trustees of these funds are typically watching with frustration as share prices rocket upwards, uncertain about whether it is too late to re-enter the market. This caught-in-the-headlights syndrome could be widespread given that the local market has already risen 50% since e...

31. DIY funds warned to lodge returns by deadline or face ATO cr

Administrators of self-managed superannuation funds must lodge their returns before the deadline of August 31, or risk significant fines or Australian Taxation Office scrutiny, one expert has warned. The warning comes after a letter sent out to tax advisers last week reportedly stated if returns for the 2009 and prior years were not turned in by August 31, those funds would be labelled non-compliant. Under the ATO's heaviest penalties, these funds could lose 45% of assets, including non-...

32. DIY super funds: Beware the sole purpose test

DIY super funds may have outperformed retail funds recently, but the rules around DIY funds can be complex. TERRY HAYES explains how the sole purpose test for DIY super works. By Terry Hayes

33. A truckload of tax and super reforms in 2013

Last year saw the usual proverbial "truckload" of tax and superannuation changes were either passed by Federal Parliament, or proposed to commence this year. It's difficult to keep up with it all, but below I set out some of the changes that might be of interest to SMEs. And as I alluded to in last week's column, this year's f...

34. Why you shouldn’t believe the latest super horror story

Superannuation headlines have been dominated over the past week by a shock-horror story purporting that a new draft tax ruling will apply retrospectively to expose many self-managed super funds to huge amounts of extra tax following the death of a member. The Australian Financial Review ...

35. Cash contributions to self-managed super funds drop 22%

Cash contributions to self-managed super funds dropped by a massive 22% during 2009-10 due to market volatility, and the outlook for the rest of the year isn't much better as SMEs suffer, a new survey from SMSF manager Multiport has found. The news comes as investors are celebrating this morning, after the Government said it will no longer pursue a ban on art held within self-managed funds, after the Cooper Review suggested such a ban be implemented. The survey of 1,200 SMSFs f...

36. When a business and DIY super fund collide

One of the biggest challenges a self-managed super fund (SMSF) can face is when the tenant of a highly valuable, fund-owned commercial property fails to pay the rent. Much of the fund's financial wellbeing may depend upon regular payment of rent – particularly if a heavily geared property is the fund's sole or dominant asset. ...

37. SME guide to Cooper super review

The final report of the Cooper superannuation review, released by the Government yesterday afternoon, is likely to have some significant consequences for the most-favoured form of superannuation among SME owners – self-managed super funds. Certainly, the review's final report gives a big tick to self-managed super fun...

38. DIY super funds: Danger in acquiring assets from related par

The superannuation laws governing self-managed super funds (SMSFs) are receiving more and more (almost daily) attention. With the number of SMSFs exploding, adherence to the laws has become a key issue, not just for the funds themselves, but for the regulator of the sector too – the ATO. Nume...

39. Do's and don'ts to survive a horror market

This highly volatile market, struggling to find its low point, still holds plenty of traps. Here are some practical tips to investors who are likely to have lost a large chunk, at least on paper, of their portfolio's value and are determined to minimise future losses. With share prices falling to long-tim...

40. DIY super experts back changes to borrowing rules

Two experts on self-manger super funds have supported changes to rules around the use of instalment warrants in DIY super funds, saying the Government's proposals will provide more certainty to the sector. Federal Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, has moved to clear up two major problems surrounding the use of instalment warrants through proposed legislative amendments. The first change involves the tax treatment of customised property...

41. Don’t overreact to speculation of government move against

Superannuation specialist Peter Crump urges self-managed super trustees not to rush to gear properties in a knee-jerk reaction to speculation that the Federal Government might reduce the tax benefits of gearing properties through SMSFs. Crump, superannuation strategist for financial planner ipac in South Australia, warn...

42. ATO warns DIY super fund members on trust loan trap

The rapid growth in self-managed super funds (SMSFs) probably acknowledges that many business people (and others) want to control their own financial destiny. That's no bad thing, but those who use these types of funds must remember that the laws governing SMSFs are strict, and the regulator - the Tax Office – is on the lookout for dodgy practices and funds breaching the law. It...

43. Too close for comfort

SME owners unquestionably dominate the ranks of self-managed super fund (SMSF) members. However, sometimes the relationship between the members' businesses and their super funds becomes far too close for comfort. As the Administrative Appeals Tribunal warned in a recent hearing, a SMSF should not be regarded as a line-of-credit to help a business try a...

44. Westpac predicts parity with US dollar by end of 2011: Econo

Westpac has increased its forecasts for the Australian dollar to rise above parity with the US dollar by year's end, but also says the housing market will remain flat during 2011. In an update to its currency forecasts, chief economist Bill Evans said Westpac has raised its target to $US1.02 by the end of the year, up from US98c. The bank's June 2011 target is now at $US1.05, although it does expect the dollar to fall back to between US95-100c in the second half of 2011. "On toda...

45. Borrowing to buy property - Should you borrow in your name o

Should I gear into property in my own name or through my self-managed super fund? Which is likely to produce the best after-tax returns in my circumstances?  These are burning questions as the popularity of borrowing to invest in property through self-managed super funds (SMSFs) steadily increases despite the uncertain outlook for residential a...

46. Self-managed super funds: strict rules apply

The rules governing self-managed super funds (SMSFs) are many and complex. With the huge growth in such funds, the regulator – the Tax Office – is always close at hand. This is not a new theme in my SmartCompany columns, but it seems I'm destined to write about an increasing number of cases before the courts and tribunals dealing with breaches of the ...

47. Tax office echoes ASIC warning about potentially illegal SMS

The Australian Tax Office (ATO) is warning trustees of self-managed superannuation funds (SMSFs) to be cautious when investing in property. Its warned arrangements that are "deliberately entered into to get around the law" can result in the fund's trustees being disqualified, facing civil penalties and even criminal charges. The ATO has also joined ASIC by warning of those individuals and companies promoting property investments to SMSF trustees.

48. DIY super fund trustee penalised for breach of law

The temptation to access superannuation early can be great, but the superannuation laws provide some harsh penalties where this happens. A recent case before the Federal Court illustrates what can happen. In that case, the Federal Court imposed a $12,500 civil penalty on a trustee of a self-managed superann...

49. ATO to crack down on loans from DIY super funds

The Australian Taxation Office will begin to crack down on loans made from self-managed superannuation funds, it was revealed at an industry conference yesterday. Commissioner Michael D'Ascenzo told the Self-Managed Superannuation Funds Professionals Association of Australia conference there has been increased interest in DIY funds, with the total number growing to 416,000 last year. But he also said related-party loans are still being made, often from these funds to struggling b...

50. Excess super contributions: Taxpayers still can’t get a wi

I don’t want to keep harping on about the excess super contributions tax issue, but so far this year, taxpayers are batting zero in excess tax cases that have come before the Administrative Appeals Tribunal. The excess contributions tax issue continues to be a problem. While some cases might be settled before they reach the AAT or the co...