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Protect yourself from early super release scams

Posted on August 7, 2018 by admin


When it comes to protecting your nest egg, avoid getting caught out by a promoter of an illegal early release super scheme. Early release super scheme scams will involve a promoter contacting you and offering to help you access your super early. They usually target individuals under significant financial pressure or those who are not knowledgeable about super laws and the repercussions and penalties involved in illegally accessing your super. You can only access your super when you meet a condition of release. Generally, when you: – Are 65 years old (even if you have not yet retired). – Reach your preservation age and retire. – Reach your preservation age and begin a transition to retirement income stream while still working. There are special circumstances where you may be able to access your super early. These special circumstances include: – Severe financial hardship – Temporary or permanent incapacity – Compassionate grounds – Temporary residents leaving Australia – Super death benefits (inheriting super) – Super less than $200 – Terminal medical condition To avoid falling for an illegal early super release scam, be wary if the promoter: – charges high fees and commissions; – requests identity documents; – claims you can […]


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Hiring temporary residents: employer super obligations

Posted on August 3, 2018 by admin


Employers are being reminded by the Australian Tax Office (ATO) not to forget that along with permanent residents; temporary residents are also entitled to super guarantee (SG). In most cases, an employer will be required to pay SG on top of their employee’s wages (temporary residents included) if they pay them $450.00 or more before tax in a calendar month. Providing the temporary resident has met all the requirements, they can submit their claim for the super that their employer has paid as a ‘department Australian superannuation payment’ (DASP) once they have left Australia. The ATO is encouraging employers to notify their temporary resident workers of the DASP application as it will be easier for these individuals to get the required supporting documents certified in Australia and then lodge once they have left the country.


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Superannuation Guarantee Amnesty

Posted on July 27, 2018 by admin


The Superannuation Guarantee Amnesty was introduced on 24 May 2018 by the Minister for Revenue and Financial Services in a bid to tackle non-payment of employee super. The Amnesty provides a one-off opportunity for employers to self-correct any past super guarantee (SG) non-compliance without incurring a penalty. However, there is a lot of ambiguity around which employees are entitled to compulsory super payments. Small business employers need to pay special attention to these particular areas: Ordinary time earnings An understanding of ordinary time earnings (OTE) is essential as it is used to calculate tan eligible employees minimum SG contributions. OTE is generally what your employees earn for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but not overtime payments. The SG is 9.5 per cent of an eligible employees ordinary time earnings (OTE). If you make super contributions under an award, check that they are enough to satisfy both the award and the SG. Issues can occur where an agreement prevails over an award, no ordinary hours of work are stipulated, where an employee gets reimbursed, there is no award or agreements and where overtime is paid the same as ordinary hours. Contractors So […]


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Reviewing your super

Posted on July 19, 2018 by admin


The ATO is encouraging taxpayers to review their super this tax time. Finding lost super or consolidating any unwanted multiple accounts can make a massive difference to your nest egg. There is over $18 billion in lost and unclaimed super. Those who have changed their name, address, job or lived overseas are at high risk of having lost super. During the last five years, more than $10.7 billion of super has been consolidated from over 2.1 million accounts through ATO online services. The ATO is also reminding taxpayers that the new super deduction is available. Most people under 75 years of age can claim a tax deduction for personal after-tax super contributions. Personal super contributions deductions provide a level of flexibility for young people that change jobs frequently, self-employed contractors, small business employees, freelancers and people whose employers do not offer salary sacrifice arrangements. To claim a deduction for any personal super contributions made in 2017/18, you must lodge a notice of intent to claim a deduction with your fund and receive a confirmation letter from them before lodging your tax return.


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SMSFs: beware of illegal early super release

Posted on July 13, 2018 by admin


The Australian Tax Office (ATO) is reminding self-managed super fund (SMSF) trustees to beware of allowing members to access their super early. A self-managed super fund (SMSF) trustee must meet a condition of release before any funds can legally be released. The ATO can issue severe penalties if you or a SMSF member access your super before you are legally entitled to do so. Some consequences of getting caught up in an illegal super scheme include the disqualification of trustees, imposition of administrative penalties, the fund being made non-complying and prosecution. The Tax Office encourages those members who have been involved in an illegal super scheme to contact them immediately. The ATO will review your voluntary disclosure and take your circumstances into account when determining any penalties.


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ASIC’s view on SMSFs as ‘one-stop property shops’

Posted on July 5, 2018 by admin


The Australian Securities Investment Commission (ASIC) has released a new report highlighting its view on the setup of SMSFs for property investments using ‘one-stop shop’ models. ‘One-stop shop models’ tend to promote the purchase of residential property through SMSF borrowing. They are usually arranged by groups of real estate agents, developers, mortgage brokers, financial advisers and so forth. This model creates conflicts of interest that may affect the advice given to set up an SMSF. For example, these businesses take advantage of customers with limited or no knowledge of SMSFs or super and have the potential to cause major financial detriment, including: – Receiving inappropriate or misleading advice to set up an SMSF which may result in members being financially worse off – The obligations of a SMSF trustee are not clearly explained by the advice provider – Members may be encouraged into a property purchase at an inflated value, or unaware of undisclosed high commissions. The Australian Tax Office (ATO) are encouraging individuals to seek independent professional advice from a licensed adviser before establishing an SMSF and undertaking an new investment in an SMSF. SMSF trustees who make a mistake are also encouraged to make a voluntary disclosure to […]


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ATO advice for SMSF members with a market-linked pension

Posted on June 28, 2018 by admin


The Australian Tax Office (ATO) has recently been made aware of circumstances where a member of a SMSF commences a new market-linked pension and unintentionally exceeds their transfer balance cap. An individual may have exceeded their transfer balance cap if they were receiving a life expectancy or market-linked pension just before 1 July 2017 (which was a capped defined benefit income stream) and then commuted the pension on or after 1 July 2017 and the transfer balance debit is nil under the special value rule in Income Tax Assessment Act 1997 subsection 294-1245(1); and then commenced a new market-linked pension. The ATO has acknowledged these are unintended consequences associated with the current law and will not take compliance action at this stage provided an individual’s circumstances align with the above situation and: if a fund does not report the transfer balance account events of the commutation or the commencement of the new market-linked pension; where the fund has reported the transfer balance debit for the commutation as other than nil.


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SMSFs: reporting change

Posted on June 22, 2018 by admin


Self-managed super funds (SMSFs) are required to provide an accumulation phase value (APV) on their transfer balance account report for 30 June 2017 in certain circumstances. SMSFs should note, APV is often different to the account balance of the SMSF member’s accumulation phase assets. This is due to the exit and administration fees and realisation costs that would be taken into account if the SMSF member would voluntarily close their account. APV is a component of a member’s total super balance which shows the value of the member’s assets in the accumulation phase at 30 June. Providing a member’s APV is conditional for SMSFs in the 2016-17 financial year. The member’s APV will be calculated as the difference between the closing account balance from the SMSF annual return and the value of the member’s transfer balance account for the SMSF at 1 July 2017 if not provided. SMSFs need to provide their APV if the SMSF member has interests in the accumulation and retirement phase at 30 June 2017 where the member has a capped defined benefit income stream or a flexi-pension in that SMSF. It is also mandatory to provide the APV where the difference between the APV and […]


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Changes to SMSF 2017-18 annual return

Posted on June 15, 2018 by admin


There is a number of changes to the 2017-18 Self-managed super fund annual return (SAR) thanks to the super changes which came into effect on 1 July 2017. Transition to retirement income stream (TRIS) accountThe ATO has included a new label for the number of TRIS accounts an SMSF member has in accumulation phase. A TRIS account is in accumulation phase unless the SMSF member has reached 65 years of age or has met another ‘nil’ cashing restriction condition of release (i.e., permanent incapacity, retirement or a terminal medical condition) and has advised their fund. Limited recourse borrowing arrangements (LRBA)New questions focused on the use of LRBAs and extra borrowings have been added to section H, items 15e and 16. SMSFs that hold assets under LRBAs will be required to complete these questions. Correct calculation of a member’s total superannuation balance (TSB)New labels to allow the make-up of the ‘closing account balance’ to be reported to support a more efficient calculation of a member’s TSB have been added. The member’s TSB may affect their non-concessional contributions cap as well as other super caps from 30 June 2017. Cessation of the temporary budget repair levyCertain tax rates for superannuation entities have […]


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Superannuation Guarantee Amnesty

Posted on June 7, 2018 by admin


In a bid to tackle non-payment of employee superannuation, the Minister for Revenue and Financial Services announced the beginning of a 12-month Superannuation Guarantee Amnesty (the Amnesty) on 24 May 2018. The Amnesty provides employers with a one-off chance to self-correct past super guarantee (SG) non-compliance without incurring a penalty and is available until 23 May 2019 (subject to the passage of legislation). Employers who take advantage of the Amnesty will avoid: penalties and charges that may apply to late payments; and are entitled to deductions for catch-up payments made during the Amnesty period to the employee’s regulated super fund or to the ATO (should employers require a payment plan). To make use of the Amnesty, employers must: voluntarily admit the amounts of prior SG shortfalls including nominal interest during the Amnesty period; and not be the subject of an audit for SG for the relevant periods. The ATO is encouraging employers to pay their SG shortfall amounts in full, including the nominal interest straight into the employee’s super fund. Failure to either remain current with SG payment duties or declare SG shortfalls in this period could result in higher penalties later on.


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Protect yourself from early super release scams

August 7, 2018

When it comes to protecting your nest egg, avoid getting caught out by a promoter of an illegal early release super scheme.

Early release super scheme scams will involve a promoter contacting you and offering to help you access your super early. They usually target individuals under significant financial pressure or those who are not knowledgeable about super laws and the repercussions and penalties involved in illegally accessing your super.

You can only access your super when you meet a condition of release.

Generally, when you:
– Are 65 years old (even if you have not yet retired).
– Reach your preservation age and retire.
– Reach your preservation age and begin a transition to retirement income stream while still working.

There are special circumstances where you may be able to access your super early.

These special circumstances include:
– Severe financial hardship
– Temporary or permanent incapacity
– Compassionate grounds
– Temporary residents leaving Australia
– Super death benefits (inheriting super)
– Super less than $200
– Terminal medical condition

To avoid falling for an illegal early super release scam, be wary if the promoter:
– charges high fees and commissions;
– requests identity documents;
– claims you can access your super and put the funds towards whatever you wish;
– and tries to persuade you to transfer or rollover your super from your existing fund to a self-managed super fund (SMSF) in order to access your super before you are legally entitled.