Request a Callback
Twitter
Facebook
LinkedIn
YouTube
Get our web app

Want to know more?

Leave your details below and we'll get in touch! Alternatively you can also make a written enquiry via our Contact form.

×

‘Unfinished superannuation business’ to watch for in 2021

SMSF services firm Heffron has outlined some of the legislative bills and pieces of guidance the SMSF industry is still waiting on and some of the recent proposals floated by the government.

 

2020-21 federal budget proposals for superannuation

As part of the 2020-21 federal budget, the government announced a raft of new measures for super funds aimed at addressing underperformance and multiple accounts.

The measures include plans to staple existing superannuation accounts to a member to avoid the creation of new account when a person changes employment, performance benchmarking and the introduction of the best financial interests duty.

Heffron head of SMSF technical and education services Lyn Formica said the government released exposure draft legislation for the measures in November, with submissions now closed.

“Given many of the measures have a 1 July 2021 start date, we expect Bills will be introduced to Parliament soon,” said Ms Formica.

Bring-forward measure for those aged 65 and 66

The bill containing the measure to extend the use of the bring-forward rules for non-concessional contributions from age 65 to age 67 failed to pass in the last two weeks of parliamentary sittings for 2020.

With Parliament not returning to early February, this leaves some clients in this age group in a difficult position.

Australian Executor Trustees senior technical services manager Julie Steed previously noted that some practitioners have been advocating a strategy when the client puts $1 more so that the bring-forward rule is triggered but the excess is only $1.

However, she warned that for many licensees, advisers need to base their advice on current laws.

Heffron managing director Meg Heffron said while contributing the full $300,000 now would not be a compliance issue if the new rules failed to be passed, it would create an excess non-concessional contribution, which would come with serious tax consequences.

Six-member SMSFs bill

The bill to increase the maximum number of members of an SMSF from four to six, Treasury Laws Amendment (Self-Managed Superannuation Funds) Bill, is also still before the Senate, said Ms Formica.

The earliest possible start date for this measure is now 1 April 2021, she noted.

In early November, the Senate economics legislation committee recommended that the six-member SMSF bill be passed after it was previously referred to the committee for inquiry and report.

Legacy pension proposal

As part of its Mid-Year Economic and Fiscal Outlook (MYEFO) released in December, the government also outlined a proposed change to enable the partial commutation of certain legacy pensions.

The MYEFO stated that the measure will help ensure that retirees who have commuted and restarted certain market-linked pensions, life expectancy pensions and similar products are treated appropriately under the transfer balance cap.

However, Ms Formica explained that unless the measure is far wider than the wording suggests, she expects it is unlikely to bring much joy to many of the members still running these pensions.

“We have long argued that the government should allow legacy pensions to be converted to simple account-based pensions,” she said.

“This would provide a simple solution to the many problems that these pensions present given that the law has changed profoundly in the 13 plus years since these pensions were actively used in SMSFs.”

Ms Formica said it appears the government instead plans on further tinkering, which will only provide relief to some members.

Non-arm’s length expenditure guidance

One of the other key items that SMSF professionals are still waiting for said Ms Formica is the ATO’s finalised ruling on non-arm’s length expenditure.

“The ATO is still to finalise their view on the situations in which SMSFs will be considered to have non-arm’s length income (NALI) because the expenses of the fund are lower than they would have been in an arm’s length situation,” she explained.

“We expect the ATO will be seeking to release their final view before the transitional rules of PCG 2020/5 – covering expenses of a general nature – expire on 30 June 2021.”

 

 

Reporter
05 January 2021
smsfadviser.com

 


Sam El Shammaa

Sam El Shammaa

Director/Financial Planner

For more than 20 years, Sam has been a financial planner helping individuals and families achieve their financial planning goals, by providing advice on Investment Planning; Insurance Planning; Tax Planning; Retirement Planning; and Estate Planning. Working with a network of highly skilled professionals in Sydney he is dedicated to providing high-quality advice and integrated wealth management solutions that simplify and enhance the quality of his clients' lives.

Sam established his own firm in 1997 and has overseen its steady development and growth. Attention to detail, good listening skills and great empathy are symbols of his appreciation by his clients. He has built long-term relationships with his growing client base and aims to provide excellent customer service.

Sam began his financial planning career in 1993 after completing a Bachelor of Science degree in 1991. Since this time he has accumulated many professional qualifications such as:

Sam has volunteered with the Cancer Council of NSW and can be seen almost every year volunteering or participating in the 7 bridges walk.

Away from the business, he enjoys spending weekends with his son. He is also a football (soccer) tragic and is a massive Chelsea FC fan.



George Pereira

George Pereira

Financial Planner

Having worked for national financial planning companies in the past, George has extensive experience in the provision of advice in risk insurance, investments and retirement planning and is focused on forming long-term relationships with his clients.

George has been awarded a Masters of Commerce (Financial Planning) and a Bachelor of Commerce through University of Western Sydney as well as having the Diploma of Financial Services (Financial Planning).


Jane Lim

Jane Lim

Financial Planner

Jane Lim is a friendly character with a bubbly personality. She has the unique ability of making complex information sound simple and easy to digest.

Jane entered the financial services industry in 2006, and worked with big blue-chip financial companies such as Count Financial Limited and AMP Financial Planning Pty Ltd.

She holds a Master's degree in Applied Finance through Macquarie University, and she is a member of the Million Dollar Round Table.

Being a self-confessed "tennis nut", Jane spends many weeknights in the tennis court, and is a frequent member of Sydney's Eastern Suburbs Tennis Competition.

Being a highly motivated professional, Jane is always eager to help her clients on a wide range of financial planning needs.

Paul Jayashekar

Paul Jayashekar

Mortgage Broker/Financial Planner

Paul has been a financial planner for over 15 years helping individuals and families successfully achieve their financial planning goals. He is very focused on building successful long-term harmonious relationships with his clients.

He provides a holistic approach on various aspects of financial advice encompassing areas such as Investment Planning; Insurance Planning; Tax Planning; Retirement Planning and has extensive experience and knowledge in these fields.

Paul's professional qualifications are:

Away from his professional life, he enjoys spending his time with his family doing various activities such as coaching his son and taking him to games. He is a very avid sports fan and a cricket enthusiast.

Christian Tanadinata

Christian Tanadinata

Client Services Manager

Christian joined Capitalwise as Client Services Manager, with backgrounds in both customer service and administration.

Christian is passionate in providing excellent customer service by being attentive to client’s need as well as being able to circumnavigate challenges.

He holds a Master's degree in Commerce specialising in Marketing through the University of New South Wales.

Volunteering is one of his delights in life, where he had spent time being involved with the Centre for Volunteering, St Vincent de Paul's Society, and Sculpture by the Sea in a variety of positions.

Jenny Zhou
Max Reinhardt

Max Reinhardt

Financial Adviser
B Econ (Hons) Cert IV FS (MB) Dip. FS (FP) AFB MeSAFAA

Max has over 20 years experience in the finance and lending industry of which over 15 years has been in financial advice. Max attained a Bachelor of Economics honours degree at The University of Sussex in 2004, after which he settled in Australia with his family.

Max has never stopped studying as he is always looking at ways he can better assist his clients and has studied many courses in financial advice, lending and technical analysis as he continues to try and stay ahead of his competitors in terms of the knowledge he can share with his clients.
Max has worked for several large and successful organisations before starting his own business in 2014. He has gained valuable experience from the likes of Lloyds Bank, American Express, HSBC, General Electric, Commonwealth Bank and Westpac. He draws on this vast experience to benefit his clients whilst bringing a much more personal touch than you would get from one of these larger organisations.

Max’s philosophy is to always put his clients first, which is what makes him so successful and popular with his clients, having built a thriving business primarily through referrals from very happy clients.

In order to better serve you, please select the appropriate contact details for the department you are looking for below.

Department Phone Email
Financial Planning (02) 8599 0835 (Option 1) info@capitalwise.com.au
Accounting (02) 8599 0835 (Option 2) accounting@capitalwise.com.au
Conveyancing (02) 8599 0835 (Option 3) conveyancing@capitalwise.com.au