Tax paying made easy by Plant & Associates

Handling taxes can be a nightmare. Especially with all the clauses, conditions and calculations involved. It
requires a lot of meticulous effort, careful inspection and complicated calculations to figure out how much
tax actually has to be paid. To make your life easier, Plant & Associates is by your side helping with tax
services so you can relax.

Plant & Associates tax accounting services are focused on educating the clients, providing them with
quality advice and offering them proactive solutions. This will ensure that the clients can take charge of
their financial future. The main office is based in Nerang on the Gold Coast while the second office is in
Beenleigh. Both offices offer a range of tax and accounting services that are compliant with the standards
and above average. When it comes to tax paying, so many questions keep popping up in our minds like –

Are we paying more tax than necessary? Is there any scope to refund some tax? Is there any eligible tax
advantage not claimed?

No one wants to consciously lose money that can be saved legally. This requires support from sector
experts and that’s where Plant & Associates come in with their years of experience. Focused on making
business tax easy, affordable, and risk-free for businesses and individuals alike across all industries. The
fees are affordable and helpful for the client to maintain a healthy growth while saving on taxation with
compliance. You can minimise your tax obligations by taking advantage of the benefits which are assigned
for your type of business.

With Plant & Associates by your side, you will never run out of the right track and your taxation budgets
and payments are well cared of.

Some of the tax services Plant & Associates tax accountants offer include preparation and lodgement of
Business Activity (BAS) and Instalment Activity Statements (IAS), Pay as you go Summary (PAYG), Fringe
Benefit returns (FBT), Superannuation, Payroll Tax, Income Tax returns for all entities – (Individuals, Sole
Traders, Trusts, Partnerships, Companies and Self-Managed Superannuation Funds).

The tax environment changes from time to time and it may become difficult for taxpayers to understand
these changes and follow-up accordingly. You have got nothing to worry about if you are with Plant &
Associates as the tax accountants here are up to date with the changes in tax environment and understand
them well.

So, take the stress out of your taxes and leave it to the experts at Plant & Associates

How to secure your financial future

When we plan for our future, we dream about a lot of things to do, like travelling the world, buying a
house, a car and then retire with a secure and stable status in life. All of these are dependent on the
financial planning that is done during the peak time of your career. So here are a few tips on how you can
secure your financial future.

Regular Savings

There is no better way to avert emergency situations than to have an emergency fund ready at the time
of need. Keep aside some amount of money every month to a savings account. Who knows, there might
come a time in life when you’re switching jobs, unemployed, or unable to work due to unexpected
circumstances. This fund will come in handy in those times. Ideally, people opt for savings which equates
to three months of living with all regular expenses covered. This can be a splendid lifesaver at the right
moment. It’s not an easy task to save up to three months of money and it takes time.

Protection Insurance

Protection insurances are financial schemes or policies which protects you in cases of sudden
unemployment, accident and sickness.
The most common type of protection insurance is life insurance. In case of unexpected death, the
nominees or pre-assigned dependants will get financial help. It can be a single instalment of a lot of money
or regular payments. The amount is settled by the conditions and factors which had been agreed upon
earlier.

Income protection is another type which provides support when you are unable to work due to injury or
sickness, and income falls. This policy is most suitable for self-employed personnel.
There is also short-term income protection insurance which supports the person in question for a limited
amount of time with regular monthly amounts, should he/she be unable to earn because of injury or
sickness. This is a type of income protection. There are special medical care schemes, covering you in case
of critical medical conditions. Most protection insurances require a regular monthly fee widely referred
as ‘premium’.

Protection insurances may come in handy as a pre-planned measure to handle unexpected situations in
life with a bit of more comfort and ease in terms of finance.

Don’t keep pending debts

In the modern lifestyle pattern, people tend to be in more debt. Mortgage, credit cards, long-term loans
and other types of schemes. There are both secure and unsecure loans. Mortgage is a secure loan which
ensures you get back your property upon repaying the debt in full. A Credit Card bill is an unsecure type
of loan because it keeps looping with interest if not paid in due time. It’s better to keep clear of unsecure
loans or debts.

Retirement funds

Consult a professional financial service provider or investment firms who offer retirement funds and
schemes. Go through all the probable options and plan on a retirement schedule or when you’re likely to
retire. You can balance it out with more investments towards the early age and slowly move to fewer
incomes as you become older.

Try to invest in a second income source or self-generating income

It might not always be possible, but investing in a second income source like a small business,
entrepreneurship or a side project will allow you to have more flexibility, though it takes a bit of added
effort. In the wide perspective of things, this will work out with sufficient time, effort and determination.
As it will grow over time, it will generate its own income and you can still keep on earning even when
you’re retiring.

These are only a few major ways of planning for a secure financial future. Of course, it’s easier said than
done. However, planning early on and starting to execute them early with full focus and carefulness will
bring good results. Checking out all possible options, planning appropriately and minimising the
unnecessary costs are essential steps to follow

Australian Superannuation Fund Industry Reaction to Potential New Government Legislation on Funds by Murray LeClair

In recent days, there has been a proposal tabled that would overhaul how superannuation funds will work in Australia. This is something of a delicate matter from a finance industry perspective, with so many people reliant on these funds as a way of ensuring an income after retirement. However, industry regulation is of course important to consumers too, so the proposal merits discussion.

What Is Being Proposed?

The new proposal states that any superannuation fund should have an independent chairman or woman, and that at least a third of trustees should be independent. While it is clear why this is something that may be raised in the public interest, it would require an overhaul of how the superannuation industry works in Australia, and has therefore caused a strong reaction from many people in the industry, including financial services minister Kelly O’Dwyer.

Kelly O’Dwyer’s Response to the Proposals for Changes to Superannuation Laws

Kelly O’Dwyer’s response as financial services minister has been that the new proposals are overly ideological and not sound for the industry. She stated that these changes wouldn’t protect members but create issues in the industry.

“The package of reforms that the government is bringing forward applies equally across the sector to all funds, whether they’re retail, industry or corporate funds.

“This is important because we force people to put money aside from their wages to provide for their retirement income, and people need to know that money is protected.”

These were Ms O’Dwyer’s responses to the proposals. Other analysts believe that this reaction is a sensible one, and the proposals won’t benefit members of superannuation funds, though some still think that the changes would make funds better managed and safer as investments.

Ideology and Finance

The discussion in this case is not so much about whether the proposals represent a nicer situation than the way the industry currently works, but about whether making changes to the systems that govern how Australian pension funds work need to change. People like Kelly O’Dwyer whose role is to understand the effects of changes on both the industry and consumers are understandably very interested in what the potential effects of these changes would be, and whether they would actually lead to benefits for citizens who want to engage with the funds or not.

The opinion of the industry so far seems to be that this change to legislation will not achieve the results it is intended to and will actually be a worse situation for consumers as well as businesses working in the industry.

Are There Other Options for Investors?

While people who want to prepare for their retirement tend to choose superannuation funds, if this is something you don’t currently like the management of, there are other ways of saving that can yield well, or you can start investing in things like stocks and shares as an individual rather than choosing a pension fund. You can also look into things like ‘what is CFD trading?’, and try to make some money to take with you into retirement from that kind of investment instead.

There really is no fool proof way to guarantee your financial stability in later life, other than being really rich, so any choice you can make is gambling on the industry working as it should. Most of us accept superannuation funds as a decent gamble. However how you feel about how they are managed, it is perhaps something you may want to consider in light of these proposed changes.

If you work in the industry, however, these potential legislative changes may well cause a lot of upset to how things are done and change the products that could be developed and sold to customers. Whether you think the ideology behind the suggestion makes sense or not, it is sure to be a period of upheaval. We don’t yet know whether these changes will be implemented or whether those in opposition to them like Kelly O’Dwyer will win the day. However, it is an interesting case to watch for anyone who is concerned with their own funds, or who works in the sector and is worried about changes.

 

“Murray LeClair is a freelance finance writer specialising in stocks and shares, forex and ISAs. After studying business at Lancaster University in the UK, Murray worked at a number of financial institutions in London and New York and is now following his passion for writing.”

 

Tax Structuring to maximise access to the Small Business Concessions (SBC’s)

What are your terms of sale – shares or business?

  • A critical negotiation point is what you are selling – whether you are selling the business and its assets, or whether you are selling the entity which holds the business. This consideration is dependent upon many things, not the least of which is the access to the general Capital Gains Tax Discount.
  • If you are selling the shares in the company, a buyer may be reluctant to take over the entity in its entirety, even with the best due diligence on their part. The buyer may have a desire to acquire the assets alone.
  • Similarly the buyer may want not just the business, but you as well (especially if you are an integral part of the business success). In such circumstances it may be possible to structure a hand-over period that suits you, or retention amounts or earn-outs that meet both side’s needs.
  • Each situation is different, and it may be possible for you to structure the sale to take advantage of the capital gains tax discount as well as other tax concessions, in a way  that satisfies both your interests and those of your buyer.
  • Whilst a company selling its business could not access the 50% cGT discount, an individual shareholder selling shares in the company could.

Company or trust

If you’re a company or trust, other than a public entity, you can also choose to disregard all or part of a capital gain where you meet all the following conditions:

    • you satisfy the basic conditions
    • you satisfy the significant individual test
    • you keep a written record of the amount you choose to disregard (the exempt amount) and, if there is more than one CGT concession stakeholder, each stakeholder’s percentage of the exempt amount (one may be nil, but together they must add up to 100%)
    • you make a payment to at least one of your CGT concession stakeholders worked out by reference to each individual’s percentage of the exempt amount
    • the payment is equal to the exempt amount or the amount of capital proceeds, whichever is less, and
    • where you receive the capital proceeds in instalments, you make a payment to a CGT concession stakeholder for each instalment in succession (up to the asset’s CGT exempt amount). If your capital proceeds from the disposal of a CGT asset are increased by one or more financial benefits that you receive under a look-through earnout right relating to that CGT disposal, you are treated as receiving those capital proceeds in instalments.

The SBC’s apply to reduce a capital gain made on the sale of an “active asset”.  There are four SBC’s:

  • The 15 year exemption – A capital gain made on the disposal of an active asset that a taxpayer has owned for at least 15 years is fully tax-exempt if the taxpayer or, where the taxpayer is a company or a trust, a significant individual of the taxpayer is at least 55 years of age and retiring when the sale occurs, or is permanently incapacitated. The company pays this amount to the individual tax free.
  • The 50% active asset reduction – A capital gain from the sale of an active asset is reduced by 50% (after applying capital losses and the CGT general discount if applicable). The company must pay this amount to the individual tax free.
  • Small business retirement exemption – Any remaining capital gain (after applying capital losses, the CGT general discount and/or the Active Asset Reduction if applicable) made on the sale of an active asset, up to a lifetime limit of $500,000 for each individual is disregarded if certain conditions are met. If the taxpayer is less than 55 years old then the funds need to be put into Super otherwise this gets paid to the individual.
  • Small business rollover – All or part of a capital gain made from the sale of an active asset can be deferred (after first applying any capital losses, the CGT general discount, the Active Asset Reduction and/or the retirement exemption if applicable) for at least two years.

Active Asset

  • A CGT asset will satisfy the active asset test if the asset was an active asset for at least half the period the asset was owned or at least 7.5years if the asset was owned for more than 15 years.
  • The definition of an active asset is set out in s52-40 which provides that a CGT asset owned by a taxpayer is an active asset at a particular time if it is used in a business carried on by the taxpayer or by an entity that is an affiliate of the taxpayer.
  • Intangible assets (e.g. Goodwill) are active assets if they are inherently connected with the business. Shares or interests held in a resident company or trust may also qualify as an active asset, if the market value of the entity’s active assets is at least 80% of the market value of all the assets of the entity.
  • The taxpayer satisfies either the small business entity test or the $6 million maximum net asset value test.

Superannuation consequences

From 1 July 2007, if you’re contributing a retirement exemption amount to a super fund or RSA, the amount is generally a non-concessional contribution. To exclude the amount from your non-concessional contributions cap and have it count towards your CGT cap amount instead ($1,415,000 for 2016–17), you must notify the fund using the Capital gains tax cap election. You must complete this form by no later than the time you make the contribution.

Getting funds out of the company

  • Payments of a 15 year exemption are not deemed dividends under s.47 and are not included in capital proceeds. These amounts are paid out tax free prior to deregistration.
  • Payments made pursuant to the retirement exemption are also not deemed dividends under s.47.
  • Retained earnings are deemed dividends.
  • A company can distribute the CGT exempt amount by:
    • Paying a dividend (this is generally unfranked as it has not borne company tax)
    • Liquidate the company – The cancellation of the shares will trigger CGT and the payment received by the shareholder in lieu of the active asset amount will constitute capital proceeds. TD 2001/14 Capital gain from this is reduced by the 50% discount and the SBC’s

Asset Protection

Sole Trader

  • No asset protection – potentially liable to the full extent of the business and private assets owned by the individual

Partnership

  • No asset protection – each partner is jointly and severally liable even if the partner had no knowledge or and was not responsible for the debt

Company

  • High level of asset protection where the objective of the client is to quarantine risk to the company. Creditors can have access to the companies assets but not to the assets of the shareholders.
  • Where the company has traded insolvent or where a Director Penalty Notice is enforced in respect of unpaid employee entitlements then the directors can be personally liable. Personal guarantees reduce the level of asset protection offered by the company.
  • A company structure does not offer asset protection where the shareholder is exposed to risk outside the company. Eg where a shareholder is at risk of becoming bankrupt due to activities outside the company. The level of asset protection can be increased if the shares are held by a discretionary trust.

Discretionary trust

  • A discretionary trust with a corporate trustee provides effective asset protection. It is important that the corporate trustee only acts in its capacity as trustee of the trust and does not carry on a business or own assets.
  • Creditors generally have recourse against the corporate trustee in the first instance and then against the assets of the trust. Creditors generally have no claim against trust beneficiaries.
  • The effectiveness of a discretionary trust to protect trust assets from a third party attack has been diluted in recent times, particularly in the context of divorce.

Unit Trust

  • A unit trust with a corporate trustee that does not carry on a business, nor hold assets, other than in capacity as trustee of the trust, provides a similar asset protection to a company.

SMSF

  • An interest of a bankrupt in a super fund, is generally speaking, a protected asset under S.116(2)(d)(iii) of the Bankruptcy Act 1966.
  • A super fund will not protect assets in the event the fund member divorces.

Structuring for negatively geared investments

Individuals/Partnership of Individuals

  • Subject to the non-commercial losses provisions with respect to business losses, individuals can apply the tax losses against their other income. Excess losses can be carried forward for use in future years.
  • Can access CGT 50% discount if the asset was held for more than 12 months, as well as potential application of other CGT exemptions.
  • The disadvantage of this structure is that when the investment starts to be profitable the income cannot be split and will be taxed at the individuals marginal rates each year.
  • No asset protection available to individuals

Discretionary Trust

  • Income can be distributed in the most tax effective manner, in accordance with the trust deed.
  • Can distribute capital gains to beneficiaries who have capital losses or are able to access the 50% discount, subject to the relevant trust deed.
  • There is an added level of protection, particularly where the trust has a corporate trustee, as beneficiaries do not hold an actual interest in the trust’s assets. Note that the effectiveness of this asset protection is undermined by the Family Court.
  • Tax losses can only be utilised to offset against other income of the trust where the trust loss rules in Schedule 2F to the ITAA 1936 are satisfied.
  • In addition, any excess tax losses are trapped in the trust and cannot be distributed to beneficiaries.

Company

  • Tax rate in a company is 30% or 27.5% if the company is an SBE.
  • There is the ability for the investment to be structured so that interest deductions are claimed at the shareholder level rather than in the company itself. (The shareholder borrows to acquire or subscribe for shares in the company and then the company uses the funds to acquire the investment without any borrowings. This effectively transfers the benefit of the negative gearing from the company to the shareholder, circumventing the issue of having excess tax losses trapped within the company.)
  • Tax losses are subject to the company loss rules.
  • A significant disadvantage of holding growth assets in a company is the inability to access the general 50% CGT discount. There is limited options to extract the 50% Active Asset Reduction amount from the company tax effectively.
  • A company has limited protection for the shareholders, as the shares are valuable assets and will be exposed to the shareholders creditors. The company provides limited liability as well as asset protection for the shareholders from the company’s creditors.

Unit Trust

  • A unit trust has the ability for the investment to be structured so that interest deductions are claimed at the unitholder level rather than in the unit trust itself. The unitholder borrows to acquire/subscribe for units in the unit trust and then for the unit trust to use the funds to acquire the investment without any borrowings. This effectively transfers the benefit of the negative gearing from the unit trust to the unitholder, thereby circumventing the issue of having excess tax losses trapped within the trust.
  • Provides asset protection for the unitholders from the unit trust’s creditors.
  • Tax losses are subject to the trust loss rules and excess tax losses are trapped within the trust.
  • Payments of non-assessable amounts to unitholders can reduce the cost base of their units in the unit trust, to the extent that the cost base is completely eroded then the excess paid to the unit holder will be a capital gain.
  • Limited protection for the unit holders as the units are valuable assets and will be exposed to the unitholder’s creditors.

SMSF

  • Tax rate is 15% whilst in accumulation mode. Assets supporting a pension are tax-free subject to the $1.6 million transfer balance cap applicable from 01/07/2017.
  • Tax losses can be used against the fund’s other income, including assessable superannuation contributions. Excess losses can be carried forward for use in future years.
  • Assets in the SMSF are trapped within the superannuation system until a condition or release has been satisfied by a member, otherwise than by way of sale in which case the sale proceeds may be similarly trapped.
  • The ability for the SMSF to borrow is limited.

Business Structures

Business Structures

Major Drivers when choosing a structure

  • Legal minimisation of tax, including reduced exposure to tax on any future capital gains.
  • Loss utilisation
  • Asset protection
  • Other commercial considerations (financing, industry or professional association requirements)
  • Family Considerations
  • Flexibility to allow for changes (to allow for parties to enter or exit the business)
  • Stamp duty considerations
  • Ease of understanding and administration

The most common types of business structures in Australia are:

Changing business structures

It is important to know that you’re not locked into one business structure for the life of your business. As your business grows and changes, you may decide to move to a different type of business structure.

 

Before changing structures, you need to be aware of the differences and obligations for each.

 

Work Related Deductions

Claiming work related deductions

Car expenses

  • When claiming work related motor vehicle deductions remember that you still need to be able to substantiate how you worked out the number of business kilometres you travelled using the cents per kilometre method.
  • In order to claim under the log book method – you must have a complete and valid log book.
  • Under the log book method, a log book will last for 5 years UNLESS you change the vehicle, your useage pattern changes, your employment changes. If any of these things change you MUST complete a new log book.
  • The motor vehicle expense deduction is not available to vehicles over 1 tonne – these expenses get claimed at D2 on the tax return (Travel Expenses).

Travel expenses

  • Remember that just because you receive an allowance from an employer does not automatically entitle you to a deduction. Travel allowance claims are only deductive where the tax payer sleeps away from home.
  • 1 tonne vehicles are not allowed to claim 100% of expenses – private useage must be taken into account
  • Parking expenses are not allowed to be claimed where an employee is traveling to and from work and parking at or near the workplace for more than 4 hours
  • Car washing expenses are not allowed where the vehicle is provided for the employee’s exclusive use

Uniform, Clothing & Laundry Expenses

  • Everyday clothing is not tax deductible, nor can a claim for laundry be made on these items.   This includes heavy duty conventional clothing such as drill shirts and trousers.
  • Only outdoor workers can claim sun protection clothing.
  • If your claim for Laundry expenses exceeds $150 you must have written evidence eg diary entries and receipts An estimate of $0.50 per mixed load or $1 for work clothes only loads can be used.
  • Conventional footwear including non slip are non deductible

If you are unsure as to the deductibility of your clothing and shoes consider the following tax rulings TR 97/12, TD 1999/62 and TR 98/5 or ask your accountant.

Self education expenses

There must be a nexus between the self education expense and the current income producing activity (Employment) otherwise these expenses can not be claimed.

Other work related expenses

  • Sunscreen and sunglasses – outdoor workers can claim these but you must adjust for private useage.
  • Home office – running costs can not be claimed on a floor percentage basis, you must use the ATO rate of $0.46 cents per hour only
  • Home Office – Occupancy costs – (Rent, mortgage interest, rates) you can not claim theses if the home is not a place of business – (A place of business would include signage and stationery nominating the address as a place of business and the area should not be readily suitable or adaptable for use as a private or domestic purpose such as a bedroom) Having a room set aside for doing admin work at the end of the day does not constitute a place of business.
  • Bank fees – you cannot claim these
  • All other expenses including computers, mobile phones, internet etc MUST be apportioned between private and business useage.
  • Vaccinations are not deductible
  • Subscriptions to staff associations or social clubs are not deductible

What are the requirements of your Tax Accountant?

  • Reasonable and direct questions need to be asked, we have also provided various checklists for you to use. (Available on our website)
  • It is not necessary for you to provide to us or have us view/sight all your receipts, we only need you to advise that you have adequate substantiation. REMEMBER, in the event of an audit you will be required to provide that substantiation to the ATO.
  • If we have suspicion that a client is making fraudulent claims we have the right to request to see the substantiating evidence, if the client refuses to provide the substantiation we can refuse to input the deduction and also terminate our services to the client.

What is written evidence?

The following can be used to substantiate your claims:

  • A document in English
  • Document from the supplier of the goods and services showing the name of the supplier, amount of the expense, nature of the goods and services, date incurred
  • Bank statements
  • credit card statements
  • BPAY reference numbers
  • email receipts
  • Invoices
  • Delivery notes
  • PAYG payment summary
  • Paper or electronic copies of documents
  • Warranty documents

Claiming work related deductions

Car expenses

  • When claiming work related motor vehicle deductions remember that you still need to be able to substantiate how you worked out the number of business kilometres you travelled using the cents per kilometre method.
  • In order to claim under the log book method – you must have a complete and valid log book.
  • Under the log book method, a log book will last for 5 years UNLESS you change the vehicle, your useage pattern changes, your employment changes. If any of these things change you MUST complete a new log book.
  • The motor vehicle expense deduction is not available to vehicles over 1 tonne – these expenses get claimed at D2 on the tax return (Travel Expenses).

Travel expenses

  • Remember that just because you receive an allowance from an employer does not automatically entitle you to a deduction. Travel allowance claims are only deductive where the tax payer sleeps away from home.
  • 1 tonne vehicles are not allowed to claim 100% of expenses – private useage must be taken into account
  • Parking expenses are not allowed to be claimed where an employee is traveling to and from work and parking at or near the workplace for more than 4 hours
  • Car washing expenses are not allowed where the vehicle is provided for the employee’s exclusive use

Uniform, Clothing & Laundry Expenses

  • Everyday clothing is not tax deductible, nor can a claim for laundry be made on these items.   This includes heavy duty conventional clothing such as drill shirts and trousers.
  • Only outdoor workers can claim sun protection clothing.
  • If your claim for Laundry expenses exceeds $150 you must have written evidence eg diary entries and receipts An estimate of $0.50 per mixed load or $1 for work clothes only loads can be used.
  • Conventional footwear including non slip are non deductible

If you are unsure as to the deductibility of your clothing and shoes consider the following tax rulings TR 97/12, TD 1999/62 and TR 98/5 or ask your accountant.

Self education expenses

There must be a nexus between the self education expense and the current income producing activity (Employment) otherwise these expenses can not be claimed.

Other work related expenses

  • Sunscreen and sunglasses – outdoor workers can claim these but you must adjust for private useage.
  • Home office – running costs can not be claimed on a floor percentage basis, you must use the ATO rate of $0.45 cents per hour only
  • Home Office – Occupancy costs – (Rent, mortgage interest, rates) you can not claim theses if the home is not a place of business – (A place of business would include signage and stationery nominating the address as a place of business and the area should not be readily suitable or adaptable for use as a private or domestic purpose such as a bedroom) Having a room set aside for doing admin work at the end of the day does not constitute a place of business.
  • Bank fees – you cannot claim these
  • All other expenses including computers, mobile phones, internet etc MUST be apportioned between private and business useage.
  • Vaccinations are not deductible
  • Subscriptions to staff associations or social clubs are not deductible

What are the requirements of your Tax Accountant?

  • Reasonable and direct questions need to be asked, we have also provided various checklists for you to use. (Available on our website)
  • It is not necessary for you to provide to us or have us view/sight all your receipts, we only need you to advise that you have adequate substantiation. REMEMBER, in the event of an audit you will be required to provide that substantiation to the ATO.
  • If we have suspicion that a client is making fraudulent claims we have the right to request to see the substantiating evidence, if the client refuses to provide the substantiation we can refuse to input the deduction and also terminate our services to the client.

What is written evidence?

The following can be used to substantiate your claims:

  • A document in English
  • Document from the supplier of the goods and services showing the name of the supplier, amount of the expense, nature of the goods and services, date incurred
  • Bank statements
  • credit card statements
  • BPAY reference numbers
  • email receipts
  • Invoices
  • Delivery notes
  • PAYG payment summary
  • Paper or electronic copies of documents
  • Warranty documents

SMSF – Self Managed Super Funds

Setting up a SMSF and comparing providers fees

It is important when shopping around to find someone to look after the administration of your Self Managed Super Fund that you read the fine print.  There are a number of SMSF’s providers who claim to set up the fund for FREE and provide the Administration services for extremely cheap but they recoup the fees through Investment Charges or Financial Advice or they only offer the cheaper rate for the first year.  Some providers outsource the administration to overseas which presents a number of issues in itself.  Ensure you are getting value for your money.

What is a self managed super fund?

An SMSF is a private superannuation fund, regulated by the Australian Taxation Office (ATO), that you manage yourself. SMSFs can have up to four members. All members must be trustees (or directors if there is a corporate trustee) and are responsible for decisions made about the fund and for complying with relevant laws.

How do Self Managed Super Funds Work?

SMSFs are a legal tax structure with the sole purpose of providing for your retirement. They operate under similar rules and restrictions as ordinary super funds.

When you run your own SMSF you must:

  • Carry out the role of trustee or director, which imposes important legal obligations on you
  • Set and follow an investment strategy that ensures the fund is likely to meet your retirement needs
  • Have the financial experience and skills to make sound investment decisions
  • Have enough time to research investments and manage the fund
  • Budget for ongoing expenses such as professional accounting, tax, audit, legal and financial advice
  • Keep comprehensive records and arrange an annual audit by an approved SMSF auditor
  • Organise insurance, including income protection and total and permanent disability cover
  • Use the money only to provide retirement benefits

Is a SMSF right for you?

  • Have you considered other do-it-yourself super options which let you choose which assets you’d like your super invested in such as shares, exchange traded funds and term deposits?
  • Have you considered changing to another fund or investment option first if you are not happy with your current fund?
  • Consider whether your self-managed fund will outperform your current fund?
  • Have you considered the costs associated with running a SMSF?
  • Super funds usually have discounted life and disability insurance which may cost you more inside SMSF.
  • Bankrupts are not allowed to be a trustee, director or member of a SMSF.
  • You can not set up a self managed super fund with the aim of withdrawing some or all of your super to pay off debts, this is illegal.

Free Self Managed Super Fund Trustee Education Program

If you’re thinking of running an SMSF, consider completing a free Self Managed Superannuation Fund Trustee Education Program designed to assist trustees in understanding their role and responsibilities.

Plant and Associates cannot give financial advice so you must source Financial advice from a licenced third party including a statement of advice, cost varies from $1100 to $3300 so shop around.

  • Financial Advice on whether a SMSF is recommended for you, includes Statement of Advice $1,100.00
  • Set up of SMSF, including registration of ABN and TFN $770.00
  • Set up of Corporate Trustee (required where SMSF if investing in Property) $1,100, including ABN, TFN registration, and first year ASIC fee.
  • Annual Administration – $1,320 Basic, $1,760 if you have share trades or are in pension mode, $1,980 if you invest in property. Please see us for an obligation free quote.
  • Auditors Fee $330.00
  • Actuarial Certificate $176.00 – required where your fund is in both Pension Phase and Accumulation Phase.

We do not offer Financial advice on what to invest in, or which investment or insurance product to choose.

 

www.plantandassociates.com.au

07 5596 5758