A senior executive of an accounting firm has reminded practitioners vacant land does not satisfy the definition of business real property (BRP) and subsequently cannot be acquired by an SMSF from a related party. Further, LDB Group principal Michael Gilmour noted while trustees might present reasons as to why the vacant land in question might be classified as BRP, none of the arguments can be considered as being valid. “The concern that we have is that this test [as to whether an asset is BRP] would need to be satisfied at the time that the transaction is to occur,” Gilmour told delegates at ..read more

Conducting a search on the Australian Securities and Investments Commission (ASIC) register should be the first port of call for auditors to determine whether an SMSF is dealing with related parties, according to a specialist practitioner. “If it’s a company [in question], I’ll do ASIC searches to check who the shareholders are, particularly if it’s proprietary limited and it’s not widely held,” BDO superannuation partner Shirley Schaefer told attendees at The Tax Institute’s recent Super Intensive. “[In one case] I had done nine ASIC searches to work out who the individuals behind a group of ..read more

SMSF accountants and auditors faced with static market valuations for assets inside a fund should question the lack of change in those from year to year, but not do the work of assessing the value themselves, an SMSF legal expert has advised. DBA Lawyers special counsel Bryce Figot said the ATO’s recent announcement that 16,500 funds had unchanged asset valuations for three consecutive years meant there was a greater focus on the work of accountants and auditors in signing off on SMSF annual returns. “The ATO said there were more than 1000 approved SMSF auditors associated within this high-ri ..read more

The exchange-traded fund (ETF) model portfolios offered by State Street Global Advisors (SSGA) have been added to the Netwealth investment platform, which is now the fourth vehicle to host them. The risk-based portfolios have been added to the platform’s Super and Wealth Accelerator investment wrap and make available to advisers the moderate, balanced and growth options available inside the SSGA offering. The investment manager stated the portfolios use an open architecture investment structure so advisers can select their own portfolio of ETFs across a range of sectors, asset classes and pro ..read more

The SMSF Association has reminded tax agents appointed as replacements to incumbent fund practitioners of the need to execute a specific procedure to ensure proper access to the records of their new clients. Specifically, the industry body has emphasised the need for tax agents to reference an SMSF’s tax file number (TFN) and not its Australian business number (ABN) when activating a new authorisation. “At this point it’s crucial that agents select the correct account level when linking clients to their client list,” the association stated in its daily member newsletter. “For example, using t ..read more

The poor design of the proposed Division 296 taxation laws has carried over into supporting regulations for calculating the treatment of defined benefit interests under the impost, according to a group of industry bodies. Chartered Accountants Australia and New Zealand, CPA Australia, the Financial Advice Association of Australia and Institute of Public Accountants also noted the draft regulations may need immediate updating while lacking critical information. The industry bodies made the claim in a submission to Treasury in regards to the draft regulations, titled Treasury Laws Amendment (Me ..read more

A proposal to allow Australians to use their super entitlements to enter the housing market will do little to improve affordability and will lead to an increase in prices instead, according to two superannuation representative bodies. In an address to the Australia Institute yesterday, Liberal Senator Andrew Bragg reaffirmed coalition support for a plan to allow first-home buyers to use super for a home deposit, arguing it will offer better outcomes for those grappling with the housing affordability crisis. However, the Association of Superannuation Funds of Australia (ASFA) pushed back at th ..read more

Global X has launched its second exchange-traded fund (ETF) focused on physical gold, marking the 37th offering in its suite of such investment vehicles available in Australia. The Global X Gold Bullion ETF (ASX code: GXLD) will track the performance of the price of gold bullion in Australian dollars by referring to the precious metal’s spot price, with the assets held in the vaults of JP Morgan Chase Bank in London. According to the ETF provider, the offering is the lowest-cost physical-backed gold ETF in the local market, charging a management fee of 0.15 per cent of the fund’s net asset va ..read more

The Crescent Wealth Super Fund will transfer its members to a new vehicle, Salaam Super, which has plans to offer a range of superannuation and pension plans, SMSF property finance and home and asset lending. Salaam managing director Professor Talal Yassine said the new offerings, which will also include a Hajj savings fund, an educational fund for school and a Janazah (funeral) fund, will be Shariah-compliant and available from 1 June. Further the transfer will see Crescent Wealth’s team of Islamic finance and wealth management specialists join the new operation. “Our aim with Salaam’s new s ..read more

A legal specialist has confirmed retaining a property in a bare trust once a limited recourse borrowing arrangement (LRBA) has been paid back is permitted by law and doing so can provide more optimal outcomes for an SMSF. “We’ve actually got this instrument [SPR 2014/1] from the ATO that says … when we get to the of the borrowing, we’re not going to breach section 71A [of the Superannuation Industry (Supervision) Act] simply because we don’t transfer [the property from the bare trust to the super fund] at the end [of the LRBA],” Business Depot legal director Neal Dallas told attendees of the ..read more