Welcome to ESUPERFUND’s October Newsletter.
In this issue, we remind you of the 2016 Online Checklist submission due date and detail some audit requirements of related party transactions. We also highlight three SMSF rule changes announced by the Government. Lastly, we introduce some new tools for you to check your super entitlements.
Client Services Manager
2016 Online Checklist Submission Reminder
If you established your SMSF before 01 July 2016 and have not submitted the Online Checklist, please complete and submit the Online Checklist before 31 October 2016 via the ESUPERFUND Client Portal.
Please note that in order to submit the Online Checklist, you will need to complete all the sections and then click on the submit button on the ‘Submit’ page.
Audit Requirements of Related Party Transactions
‘Related party transactions’ are one of the most common mistakes made by SMSFs.
To avoid contravening SMSF rules, it is important to note that a number of investment restrictions apply to transactions involving 'related parties' of your fund.
As required by the Superannuation Industry (Supervision) Act 1993 (SIS) S 66, the SMSF cannot acquire an asset from a related party unless it is traded at market value and is:
a listed security (for example, shares, units or bonds listed on an approved stock exchange);
business real property;
an in-house asset, provided the market value of your fund’s in-house assets does not exceed 5% of the total market value of your fund's assets;
an asset specifically excluded from being an in-house asset.
You may need special consideration for the following transactions which can involve a related party:
Investments in property
Your fund’s property cannot be occupied by any related party of the fund, unless the property is a business real property.
Collectables and personal use assets
Your fund’s collectables and personal use assets must not be stored in the private residence of any related party nor be leased to any related party.
If the collectables and personal use assets held by the SMSF are sold to a related party, they must be sold at market price as determined by a qualified independent valuer.
Investments in private companies
It is important that the private company your fund invests in is not a related party of the fund or,
in the case where the private company is a related party of the fund (i.e. the investment in this company is an in-house asset),
the total value of your fund’s in-house asset cannot be more than 5% of your fund’s total assets.
Loan to a member of the SMSF or any relative of the member
SIS S 65 specifically prohibits a SMSF from providing any financial assistance to a member or their relative.
For more information about related parties, please refer to the ATO website.
SMSF Rule Changes You Need to Know About
There are some important changes you should be aware of concerning SMSFs announced by the Government in the May 2016 Budget on 15 September 2016. We have summarised these government changes as follows:
Learn more about the SMSF rules changes today.
New Tools to Check Your Super Entitlements
ATO has released three new tools you can use to work out if you are eligible to be paid super contributions from your employer, and how much.
There is also a tool to report employers failing to pay super contributions.
The eligibility tool works out if you are entitled to super guarantee contributions.
The estimate tool calculates your estimated superannuation guarantee amount, based on quarterly earnings.
The complaint tool can be used to report employers who are not paying super contributions correctly.