Minimum Pensions
Firstly let's draw your attention to the pension draw-down relief which will continue in the 2012 – 2013 year for account based pensions. Minimum payment amounts for account-based, allocated and market-linked pensions will continue to be reduced by 25%. As equity markets have continued to be volatile, this relief will hopefully allow retirees to recoup some of their capital losses as the markets recover.
SMSF Regulations
There is a new web based document setting out the rules for collectables and personal use assets. Make sure you understand these requirements. Remember these rules took effect on 1 July 2011.
Self-managed superannuation borrowing continues to attract interest and again there has been a need to clarify certain issues around what an "acquirable asset" is and the rules for "repairing" or "maintaining" the asset. Get an update by reading SMSFR 2011/D1.
The annual return for new SMSF registrants is due by 28 February 2012. Make sure you pay attention to the questions in the return and more importantly understand the question before you answer "yes" or "no".
The ATO has three focus areas from a compliance point of view. They will be monitoring non or late lodgements, compliance breaches without and auditor contravention report and unrectified auditor contravention reports. Non lodgement may result in penalties and worse, the fund could be declared a non-complying fund. So, Trustees must make sure they are working on preparing their financial operating statements and appointing their independent approved auditor to review and confirm their funds compliance.
Make sure that you report the contributions correctly. As contribution caps are a real issue you do not want to exceed them. So make sure you get the reporting right and avoid issues. You must report all personal contributions at the "personal contributions" label in the SMSF return. Whether these contributions are treated as concessional or non-concessional is determined by what the member is allowed as a personal deduction in their tax return.
Most importantly, avoid at all costs getting your name published by the ATO as a disqualified trustee. A mistake like the case of Olesen v Parker could cost you $50,000 in penalties!
