The AAT recently held that interest income derived by an SMSF as the sole beneficiary of a unit trust was not non-arm’s length income (‘NALI’), and so this income could still be treated as exempt current pension income.

In a recent decision, the High Court confirmed that an SMSF binding death benefit nomination (BDBN) can last indefinitely.

By way of background, the SMSF in question had two members, who were both directors of the corporate trustee.  The appellant was the daughter of one of the members.

It is a general principle of trust law that the money and assets of the trust must be kept separate from any money and assets held by the trustee personally, or by other entities.

The Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 received assent on 22 February 2022, and so it is now law.

Measures of this legislation include the following:

An interesting question is whether an SMSF can lease an asset from a related party, or would this constitute an acquisition of an asset (being a leasehold interest) from a related party that would contravene S.66 of the Superannuation Industry (Supervision) (SIS) Act 1993?

In a recent decision, the AAT affirmed the ATO’s decision that a plumber was engaged to perform services as an employee under the expanded legislative meaning of the term as he worked under a contract that was wholly or principally for his labour.

It is generally known that an SMSF is prohibited from acquiring a property or other asset from a related party such as a member, subject to some specified exceptions (such as where the property is “business real property”).

The ATO has recently confirmed that individuals who received a COVID-19 early release of superannuation amount will be able to re-contribute up to the amount they received without the contributions counting towards their non-concessional cap.

The ATO said these COVID-19 re-contributions:

The key superannuation measures announced in the 2021 Federal Budget can be summarised as follows:

The release of the average weekly ordinary time earnings (AWOTE) data for the December 2020 quarter has enabled the calculation of certain superannuation rates and thresholds for 2021-22, as set out below.  However, all figures should be confirmed against the Tax Office Website document, ‘Key superannuation rates and thresholds’.

The superannuation general transfer balance cap (TBC) is to increase from $1.6m to $1.7m on 1 July 2021, following the release of the All Groups CPI index number for the December 2020 quarter.

A bankrupt person is a “disqualified person” as defined in the superannuation legislation, and as such, is prohibited from being a trustee (or director of a corporate trustee) of an SMSF.

In a recent decision, the AAT set aside a decision of the ATO and ruled that a service technician was an independent contractor rather than an "employee" of a machinery repair business for superannuation guarantee purposes. 

There were no measures specifically concerning SMSFs in this year’s federal budget, delivered on 6 October 2020. However, several measures were announced concerning non-SMSF superannuation funds. More particularly, the Your Future, Your Super package, which is to commence on 1 July 2021, will see the following changes:

Pursuant to recent legislative amendments, individuals now have until 31 December 2020 (extended from 24 September) to access up to $10,000 of their superannuation under the compassionate ground of release that was introduced in response to the Coronavirus in April this year. 

Amendments have recently been made to the superannuation legislation that allow more people to make voluntary superannuation contributions from 1 July 2020.

The superannuation legislation imposes many restrictions in relation to dealings between an SMSF and related parties.  An investment by an SMSF in a related party or related trust is generally prohibited as an “in-house asset” and an SMSF is generally prohibited from acquiring an asset from a related party.

In a recent decision, the AAT has confirmed the ATO's decision that a person who provided services as part of an asbestos removal/building renovations business was an employee rather than an independent contractor. Consequently, the employer was liable for superannuation guarantee charges which amounted to approximately $15,000.

The AAT has upheld amended assessments for an SMSF which treated private company dividends received by the fund as non-arm's length income (NALI), subject to a penalty tax rate of 45%.

Editor: Some of our representatives from SAN, including the NTAA's CEO, travelled to Canberra last month to lobby Senator Jane Hume in relation to FASEA education restrictions, exam timeframes and excessive ASIC industry funding levies being charged to limited scope advisers.

The Senator has since made the following announcements.

The AAT has upheld an ATO decision not to remit a superannuation excess transfer balance (ETB) tax liability in relation to the notional earnings that continued to accrue after the initial excess transfer balance had been commuted.

There are serious taxation consequences for an SMSF that ceases to be a resident fund and therefore loses its complying status.

To be a complying superannuation fund, an SMSF must be an Australian superannuation fund at all times during the year of income when it was in existence.  Under the relevant legislation, this requires the following:

We’ve made many enhancements to the SAN SOA Assist software, so please ensure that you install version 2.04 next time you log in

If you already have SOA assist installed, login to our website and go to the SOA software area to download the update.

The Federal Government announced it has extended the deadlines for both the exam and the additional education requirements for existing advisers.

Advisers must now complete the FASEA exam by 1 January 2022 (one additional year); and meet FASEA’s qualification requirements by 1 January 2026 (two additional years).

It is always possible that a member of an SMSF may lose mental capacity.

In a recent decision, the AAT has upheld an ATO decision to disqualify an individual from acting as the trustee of an SMSF as he was involved in serious contraventions of the superannuation legislation, including lending money to members.

The Full Federal Court recently upheld a decision by a super fund trustee to pay a death benefit to a deceased member's Legal Personal Representative (‘LPR’) after ruling that the deceased was not in an "interdependency relationship" with his father. (Refer Williams v IS Industry Fund Pty Ltd [2018] FCAFC 219).

Late last year, regulations were made to allow certain recent retirees an extra year to contribute to superannuation, despite the fact they no longer passed the ‘work test’.

It is important to be aware of the trustee/member rules that apply to self-managed superannuation funds (SMSFs), as set out in S.17A of the Superannuation Industry (Supervision) Act 1993 (“SIS Act”).

Many SMSFs lease business real property to related parties (since such a lease can be excluded from being an in-house asset of the fund – refer S.71(1)(g) of the Superannuation Industry (Supervision) (SIS) Act 1993).

The Supreme Court of Queensland has ruled that a superannuation binding death benefit nomination (BDBN) executed under an enduring power of attorney (EPOA) was effective to confirm and extend the member's previous BDBN, but would be an invalid "conflict transaction" if the attorneys attempted to vary the BDBN.

The ATO recently issued Law Companion Ruling LCR 2018/5 to provide guidance on the first home super saver (FHSS) scheme.

In a recent decision, the AAT has upheld the Commissioner's decision not to disregard or  re-allocate a taxpayer's excess non-concessional contributions.

Unfortunately, there are circumstances whereby a member of an SMSF may lose mental capacity, e.g., as a result of suffering a stroke, or acquiring a brain injury in a car accident.

The Full Federal Court recently upheld a superannuation trustee’s decision to pay a death benefit to the member's estate, rather than to the appellant who claimed she was the deceased’s de facto spouse or in an interdependency relationship with him.

In a recent decision, the AAT held that a taxpayer did not make a valid election to treat certain payments from his SMSF as superannuation lump sums (rather than income stream benefits) for tax purposes.

In a recent decision, the Federal Court held that a lecturer was an "employee" rather than an independent contractor for superannuation guarantee purposes.

It is important to understand the definition of “relative” for the purposes of S.17A of the Superannuation Industry (Supervision) Act 1993 (SIS Act), to ensure that an SMSF does qualify as an SMSF. 

The Federal Court found RI Advice Group Pty Ltd ('RI Advice') — an Australian financial services ('AFS') licensee — failed to take reasonable steps to ensure that its former financial adviser, John Doyle, provided appropriate advice to clients, acted in the clients’ best interests, and put the clients’ interests ahead of his own. 

The Financial Sector Reform (Hayne Royal Commission Response — Better Advice) Bill 2021 ('Better Advice Bill') was introduced into Parliament on 24 June 2021 and passed the House of Representatives on 4 August 2021.  It delivers Recommendation 2.

Together with other Associations, we have been lobbying the Government for months to reconsider how it charges financial advisers — especially accountants who are authorised representatives under an AFSL such as members of the SMSF Advisers Network ('SAN'), the NTAA's wholly-owned financial advice service.

It is common practice for SMSFs to lease business real property to related parties.   However, as discussed in detail in SMSFR 2010/1, serious compliance issues may arise if the lessee makes improvements to the SMSF’s business real property, as the SMSF may then be deemed to have acquired an asset in breach of S.66 of the SIS Act. 

In a recent decision, the AAT has disqualified a director of an SMSF corporate trustee for various contraventions of the SIS Act.