SMSFs investing in collectables

CATEGORY: Self Managed Super Fund

New standards for SMSFs investing in collectables and personal use assets

From 1 July 2011, tighter legislative standards will apply to all collectables and personal use assets purchased by self-managed super funds (SMSFs). This is to ensure investments are made for genuine retirement purposes and not for current day benefits.

Collectables and personal use assets include artwork, antiques, artefacts, motor vehicles, jewellery, memorabilia, wine or spirits, coins, medallions or banknotes, postage stamps or first day covers, rare folios, manuscripts or books, recreational boats and memberships of sporting or social clubs.

The new standards apply to the acquisition, disposal, storage and maintenance of these items. The rules state that:

• the item must not be leased to, or part of a lease arrangement with a related party (a related party includes a member of the fund)
• if the item is transferred to a related party, it must be independently valued
• the item must not be stored in the private residence of a related party
• the item must not be used by a related party
• the decision on the storage of the item must be recorded and kept for at least 10 years after the decision has been made
• the item must be insured in the fund's name.

You should contact us immediateley if your SMSF currently has collectables or if you want to invest your SMSF funds into collectables. The ATO has given SMSFs until 1 July 2016 to comply with these new regulations  or dispose of the item.

Posted by: Steve Wilson

Paid Parental Scheme

CATEGORY: Industry News

The Australian Government's Paid Parental Leave Scheme starts on 1 January 2011. Eligible employees with a child born or adopted on or after 1 January 2011 can take 18 weeks of paid parental leave at the national minimum wage, which is currently $570 per week before tax. Full-time, part-time, contract and self-employed workers may be eligible.

From 1 July 2011, employers must provide parental leave pay to their eligible employees who have been with their business for at least 12 months before the expected date of birth or adoption of their child. An employer's role in the scheme can start earlier if the employer and employee by agree. Employers can get ready by registering now for Centrelink business online services.

The Family Assistance Office will give employers funds to provide paid parental leave pay to their employees. They will also contact employers to start this process. Employers don't need to change their employee's usual pay cycle, set up special bank accounts or report back to the Family Assistance Office. They just have to provide the parental leave pay to their employee with the usual tax deducted.

Employers will not need to make super contributions on parental leave pay. Also, it will not increase employer's:

- payroll tax

- workers compensation premiums 

Posted by: Steve Wilson

Changes to NSW Stamp Duty and SMSF

CATEGORY: Self Managed Super Fund

Below is an article taken from Investor Daily written by Darin Tyson-Chan on recent changes to stamp duty law in NSW and the impact this will have on self managed super funds. Below is why we always recommend corporate trustees for self managed super funds.

NSW Stamp Duty Changes impact SMSF trustees

Stamp duty laws in NSW have been amended, resulting in the scrapping of a concession that applied to the change of trustees of self-managed superannuation funds (SMSFs) and making the employment of corporate trustees for these funds more attractive.

"Prior to 1 July 2010, each transfer of property to a new trustee would have been stampable at $50. Now, if the trustees are individuals and the transfer is going from individual to individual or from company to individual, that transfer will now be subject to ad valorem duty, which is extraordinary," Townsends Business & Corporate Lawyers special counsel Michael Hallinan said.

It means if an individual trustee is added or removed from an SMSF in NSW, stamp duty will be charged at a rate proportionate to the value of the asset that is having to be transferred into the new trustee's name.

SMSF trustees are still entitled to pay $50 stamp duty in some circumstances where assets are being transferred, as long as three conditions are met.

"One is that none of the continuing trustees remain or can become a beneficiary of the fund. Two, the new trustee cannot become a beneficiary of the fund. And three, the transfer is not part of a scheme," Townsends Business & Corporate Lawyers principal Peter Townsend said.

One way of avoiding being caught out by the legislation change is to use a corporate trustee for an SMSF, according to Townsend.

"At this stage, I cannot see how you can use an individual trustee for a new SMSF in NSW given the prospect of there being a duty at any time of change and that includes death," he said.

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Posted by: Steve Wilson