Back to the future for Trustees os Self-Managed Super Funds

2. This presentation has been prepared by Meridian Wealth Management Pty Ltd, Corporate Authorised
Representative No 341010 of My Adviser Pty Ltd (ABN 80 065 370 354 – AFSL 238370) and is for
general information only.
Every effort has been made to ensure that it is accurate, however it is not intended to be a complete
description of the matters described. The presentation has been prepared without taking into account
any personal objectives, financial situation or needs. It does not contain and is not to be taken as
containing any advice or recommendation. Furthermore, it is not intended that it be relied on by
recipients for the purpose of making investment decisions and is not a replacement of the
requirement for individual research or professional tax advice.
Meridian Wealth Management Pty Ltd and My Adviser do not give any warranty as to the accuracy,
reliability or completeness of information which is contained in this presentation. Except insofar as
liability under any statute cannot be excluded, Meridian, My Adviser and its directors, employees and
consultants do not accept any liability for any error or omission in this presentation or for any resulting
loss or damage suffered by the recipient or any other person. This document was accompanied by
an oral presentation, and is not a complete record of the discussion held.

3.  Founded in 2004 by Director and Principal Financial Planner Paul Dunn, Meridian
Wealth Management is a boutique advisory firm with expertise in investment advice,
superannuation strategies, personal insurance and estate planning
 We are based in Melbourne and service clients in Australia and overseas
 We currently service 65 clients, 15 of whom have SMSF‟s, advise and administer
$42 million in assets
 Meridian Wealth Management is Corporate Authorised Representative No 341010 of
My Adviser Pty Ltd AFSL 238307
 Meridian Wealth Management Pty Ltd is 100% owned by Paul Dunn, My Adviser Pty
Ltd is 100% owned by it‟s directors and staff
 The private ownership is important as it means that no-one dictates the services we
offer, nor the investments and strategies that we recommend

4.  To provide professional financial advisory services
 To compliment the expert taxation advice and accountancy services
that you currently receive
 To update you on the rules and legislation that you must abide by
as a trustee of your Superannuation Fund
 To help you plan for your retirement and make the right investment
decisions for your fund

5. Contributions
 Concessional
 $25,000 (indexed) per year taxed at 15%
 $50,000 contribution cap for persons over age 50 with under $500,000 balances taxed at 15%
 Amounts in excess of the above caps will incur additional tax of 31.5% and counts towards the NCC
 Non-Concessional
 $150,000 per year
 Members under age 65 at any time in a financial year may contribute up to $450,000 by bringing forward
up to two years full entitlements
 Amounts in excess of cap is taxed at 46.5%
 CGT Small Business Concession
 $1,100,000 lifetime limit

6. Pensions
 Transition to Retirement Pension (TTR)
 A TTR Pension is an income stream available to you if you have reached „preservation age‟
 Allows you to access a concessionally taxed (or tax free if over 60) superannuation income stream while
you are still working
 Maximum of 10% of account balance can be taken in any financial year
 Can supplement reduced take home pay after salary sacrifice
 Superannuation account balance can decline if not accompanied by a salary sacrifice strategy
 Pensions for Retirement
 If you have already retired and haven‟t started a pension you can by-pass the „transition‟ phase and
commence an account based pension
 Account based pension has less restrictions than a TTR Pension:
 You are able to withdraw lump sums
 Minimum Pension payment applies
 No maximum imposed on pension payments

7. When is Super Payable?
 Death or Total & Permanent Disablement
 Attaining age 65
 Retirement after age 60
 Retirement after age 55
 Reaching age 55
 Cessation of employment

8.  Tax incentives provided by Government for self
provision
 Administrative efficiency compared with non-
superannuation structures
 Manage retirement cash flow to replace working
cash flow

9.  Tax breaks on putting money in super
 Concessional treatment within fund
 Tax breaks on withdrawal

10.  Less than 5 members in the Fund
 All members are trustees or directors of
corporate trustee
 Special rules for single member funds
 No member is an employee of another member
unless related
 No trustee paid for trustee duties

11.  Sophisticated investors seeking flexibility
 Self-employed or substantially self-employed
individuals
 Small Businesses looking to implement
business succession arrangements
 Families wanting to establish a common super
fund
 Individuals with sizeable funds to invest i.e.
$200,000
 Individuals who make regular sizeable
contributions
 Individuals who want to be actively involved

12.  Members as trustees have control of
decisions
 Ability to have direct investments
 Generally less restrictions on
investment choice
 Cost may be lower than a retail
super fund
 Transparency

13.  Individual is personally liable for
non-compliance
 ATO is Regulator
 Individual must expend time for
management and decision
making
 Inability to access competitive
group Death/TPD insurance

14. Section/regulation  s109 Investments to be maintained on
 s52(2)(d) Separation of assets an arm‟s length basis
 s52(2)(e) Hinder the trustee  s111 Accounting records
 s62 Sole purpose test  s112 Accounts and statements
 s65 Lending to members  s113(1A) Trustees to provide
 s66 Acquisition of assets documents to the auditor
 s67 Borrowing  s121 Disqualified persons not be
 s82 In-house assets trustees
 s83 In-house assets  r4.09 Investment strategy
 s84 In-house assets  r5.08 Minimum benefits
 s85 In-house assets avoidance  r 6.17 Restriction on payment of
schemes benefits
 s103 Minutes and records  r7.04 Acceptance of contributions
 s106 Significant adverse events interests

15. Must consider and address
 Investment objectives & potential
investment methods
 Investment risk/return
characteristics & diversification
 Fund liquidity and ongoing cash
flow requirements
 Ability for fund to pay benefits
when required

16.  Restrictions apply to both contributing and
purchasing assets
 Exemptions for:
 Listed securities
 Business real property
 Widely held trusts
 Bank deposits

17.  In house assets are:
 Loans to related parties or trusts
 Investments in related parties or trusts
 Assets subject to lease or lease arrangements with a related
party
 Limited to a total of 5% of the market value
of the Fund

18. Lump Sum Death Benefits
 Nominations
 Binding Nominations are valid for 3 years and must be always be updated
 Non-lapsing binding nominations remain in force indefinitely (unless updated or revoked)
 Nomination to the Estate (or Will)
 Taxation of Death Benefits
 Benefits are paid out Tax Free to beneficiaries who are tax dependant on the member
 Benefits paid out to non dependants will be taxed at 16.5% of the taxable component

19. Death Benefit Pensions
 A Death Benefit can be paid in the form of a pension if the beneficiary is:
 A SIS dependant who is not a child of the deceased
 A child who is:
 Less than 18
 Aged 18 – 24 inclusive and was financially dependant
 Aged 18 or more and has a qualifying disability
 A death benefit pension that is paid to a child must cease when the child reaches
the age of 25, unless the child has a qualifying disability
 A lump sum payment made after a pension payment is tax free to the child

20.  How much is tax free and how
much is taxable?
 What amount can be taken
immediately ?
 Has the member met a
condition of release?
 Is there sufficient cash or do we
need to sell any assets

21.  Very few people can really “do it themselves”
with self-managed super funds
 Most need assistance with administration,
compliance, investments and strategy
 The cost of non-compliance, a 46.5% tax rate
and a fine could far outweigh the regular costs
of ongoing professional advice

22.  Make sure the SMSF complies with the sole purpose test at all times while the fund is in
existence, including when investing fund assets and paying benefits upon retirement of
members.
 Make sure you developed an investment strategy that you regularly review.
 Ensure your investment strategy takes into account the retirement goals of your members.
 Take into consideration the risks involved in certain investments.
 Take into consideration what bills your SMSF has to pay and allow enough cash to meet
these expenses.
 Take into consideration when benefits will need to be paid.
 Consider diversifying your SMSF‟s investments.
 Have a separate bank account for your SMSF and pay the expenses of your fund from
that bank account only.
 Ensure your trust deed is updated to allow for all types of contributions to be accepted
 Review your families Estate Planning arrangements and do not forget your SMSF

23. Australian Taxation Office (Regulator)
Trustee (YOU)
Financial Advisor Accountant
-Strategy & Structure -Accounts
-Investments -Tax Return
-Insurances
SMSF
Solicitor
-Trust Deed Amendments Auditor
-Estate Planning -Compliance
Administrator -Fund Audit
-Fund Admin
-Contributions
-Withdrawals
-Reporting
-Online Access

24.  Superannuationis the only asset most people
end up with when they retire
 You take more out of super that what you will
put into it
 Super is what YOU make of it