How do we make Super fairer?

[Ves]

They would just make it so a fund couldn't hold an assett that can't be readily valued. Easy.
Stroke of a pen, you get 12 months or even 24 months to remove it from your fund.

They're actually already doing that by really tightening the rules on things like collectibles (insurance, market valuation each year, additional documentation, blah blah).

It really, really annoys me, because it needlessly makes my job harder. And if my job becomes harder you can gaurantee that you guys with SMSF will be paying me more to do your tax return each year!

Sorry for ranting a bit, but I hate red tape.

 

[Ves]

As you draw on your funds in retirement, the non concessional component is eroded as you are not contributing.

Just wanted to comment quickly - I don't think this is the case. As soon as you hit "pension mode" the percentage of your taxable and non-taxable components crystalise. These are then set in stone, no matter what you earn or withdraw within your pension account - unless of course you commute (stop) the pension and go back to accumulation mode.

Is this what you meant, sptrawler?

 

[sptrawler]

Just wanted to comment quickly - I don't think this is the case. As soon as you hit "pension mode" the percentage of your taxable and non-taxable components crystalise. These are then set in stone, no matter what you earn or withdraw within your pension account - unless of course you commute (stop) the pension and go back to accumulation mode.

Is this what you meant, sptrawler?

No, you are correct Vespuria, I was thinking more on the 16.5% exit tax on closing and didn't consider the proportioning rule. The ability to commute the pension is a real bonus, rather than having to start another accumulation account.

 

[sydboy007]

Will be interesting to see if the ATO thought bubble on providing a loan to your SMSF as sub economic rates will pass muster.

I can see this being a very effective way of gearing up the fund and bypassing the contribution limits. Could be an interesting idea if you are aged 55 to provide a 5 year loan to your SMSF on a no interest payments basis for 5 years and then start to make payments to yourself once it's possible to take it back tax free. Heck it even seems like you could just write off the interest and leave it within the SMSF

 

[Ves]

No, you are correct Vespuria, I was thinking more on the 16.5% exit tax on closing and didn't consider the proportioning rule. The ability to commute the pension is a real bonus, rather than having to start another accumulation account.

It's pretty flexible. You can have as many pensions as you want - but only ever one accumulation account. If you like you could commute a pension and combine it with your accumulation account to make a new pension that includes both balances too. There is no penalty for doing this (other than perhaps mixing a high-tax free proportion with a lower tax free proportion if the accounts are different).

 

[Ves]

Will be interesting to see if the ATO thought bubble on providing a loan to your SMSF as sub economic rates will pass muster.

Sub-economic - and even NIL interest according to a recent ATO press release.

Lend your Fund money from a personal stash (no limit) and use it to buy a property using a bare trust arrangement. Meanwhile you don't have to charge your Fund interest.

I think they will change this pretty soon though - it seems to be at odds with everything else the ATO is doing.

 

[sptrawler]

It's pretty flexible. You can have as many pensions as you want - but only ever one accumulation account. If you like you could commute a pension and combine it with your accumulation account to make a new pension that includes both balances too. There is no penalty for doing this (other than perhaps mixing a high-tax free proportion with a lower tax free proportion if the accounts are different).

The only down side is government seeing a pool of money.
They would love to be able to spend it on infrastructure.

 

[sptrawler]

Sub-economic - and even NIL interest according to a recent ATO press release.

Lend your Fund money from a personal stash (no limit) and use it to buy a property using a bare trust arrangement. Meanwhile you don't have to charge your Fund interest.

I think they will change this pretty soon though - it seems to be at odds with everything else the ATO is doing.

But it certainly stimulates a sluggish housing sector. Hang a carrot out to the smsf to purchase rentals while interest rates are low and rental yields are relatively high.

I think it will be a nightmare when the property is valued for pension purposes. Also the gov may think it better to have smsf as investment property owners, than high income earners negative gearing.