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Offline 360c

  • 300kph+ club
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  • Joined: Apr 2006

  • Drives: Purple People Eater
I've already done my maximum deductible allocation because of the budget fears, and will likely do the 3 years of undeductible allocation soon as well.

I have always contributed the maximum concessional contribution for myself and the Mrs every single year. When I have spare funds I make as much non-concessional contributions as I can afford each year as well. I would love to use the "bring forward" rule to contribute 3 years of non-concessional contributions for both of us before the budget; but the timing isn't right this year unfortunately.



Offline TomE


  • Joined: Aug 2010

  • Location: ADL

Trustees also need to be aware that once they reach the transition to retirement or retirement phase, there is an age based requirement that requires a certain % of the funds assets to be paid out each year, and that % rises as you get older. This can cause considerable difficulty if the fund is loaded up with illiquid assets and doesn't have enough cash to make these payments.

Running an SMSF comes with some extremely onerous responsibilities and you need to keep up to date with ever changing rules and laws. It is a minefield on many levels with traps and pitfalls everywhere. As Tristan says, it definitely isn't for everyone.

Also if your wife/trustee dies the SMSF illiquid assets don't transfer to the surviving trustee. The assets may need to be sold to produce the cash equal to 50% of the funds value so it can be paid to the estate and then potentially bequeathed back to the husband outside super.

This is when mum and dad are getting caught as they are tying up 100% of there funds in investment property.

"There's too many self-Indulgent wieners in this city with too much bloody money! Now, if I was driving a 1967 275 GTB four-cam... "



Offline 360c

  • 300kph+ club
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  • Joined: Apr 2006

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Also if your wife/trustee dies the SMSF illiquid assets don't transfer to the surviving trustee. The assets may need to be sold to produce the cash equal to 50% of the funds value so it can be paid to the estate and then potentially bequeathed back to the husband outside super.

This is when mum and dad are getting caught as they are tying up 100% of there funds in investment property.

I am guessing they either don't have a trust deed prepared by a specialist or they don't have a binding death nomination specified.
It is extremely important to have the trust deed looked at by a specialist and regularly reviewed and updated. Using an "off the shelf" trust deed supplied by an accountant is potentially a very big mistake.



Offline TomE


  • Joined: Aug 2010

  • Location: ADL
There is no reason that car could not be owned by an SMSF provided the rules are adhered to rigidly. However doing so would remove the joy of owning the car in the first place in my view.


What  is stopping me buying a Dino in my SMSF and leasing it to you. You then buy a DB6 in your SMSF and lease it to me.

Technically I am deriving an income and capital gain from my investment for my retirement, without any form of benefit. Yet I have a DB6 to drive around in.
"There's too many self-Indulgent wieners in this city with too much bloody money! Now, if I was driving a 1967 275 GTB four-cam... "



Offline TomE


  • Joined: Aug 2010

  • Location: ADL
I am guessing they either don't have a trust deed prepared by a specialist or they don't have a binding death nomination specified.
It is extremely important to have the trust deed looked at by a specialist and regularly reviewed and updated. Using an "off the shelf" trust deed supplied by an accountant is potentially a very big mistake.

90% are off the shelf.

My understanding is that you have to have 50% in liquid investments or take out a life insurance policy through the the SMSF which specifically states that the payout constitutes the payment requirement to the estate. Messy stuff.
"There's too many self-Indulgent wieners in this city with too much bloody money! Now, if I was driving a 1967 275 GTB four-cam... "



Offline 360c

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What  is stopping me buying a Dino in my SMSF and leasing it to you. You then buy a DB6 in your SMSF and lease it to me.

Technically I am deriving an income and capital gain from my investment for my retirement, without any form of benefit. Yet I have a DB6 to drive around in.

That was a reasonably common scenario; but I think they have knocked any lease agreements on the head now.



Offline 360c

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90% are off the shelf.

My understanding is that you have to have 50% in liquid investments or take out a life insurance policy through the the SMSF which specifically states that the payout constitutes the payment requirement to the estate. Messy stuff.

Yup, a great many are off the shelf deeds which can create a lot of problems when there really isn't a "one size fits all" solution.
AFAIK there is no set requirement to have a specific % of the assets in liquid investments, though you have to have a documented investment strategy that needs to be updated should you wish to change investment direction, say by purchasing a property under a limited recourse arrangement. Insurance taken out in an SMSF also needs to be done correctly with the advice of a specialist.

I seem to be updating my Trust deed every 2nd year as circumstances, rules and regulations change.
IMHO you would be out of your mind to run your own SMSF without regular reviews by specialists in the field.



Offline Clive005


  • Joined: Sep 2012

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That was a reasonably common scenario; but I think they have knocked any lease agreements on the head now.
thought about this as a possibility with property



Offline PA

  • One man comedy gala

  • Joined: Jan 2008

  • Location: www.club-carbon.com
I've ripped up floor boards in circa 1900s house, but yet to find a cellar. I've just built a 36m2 attic room that i'm open to offer / bribes to house your treasured plants. PA can supply pictures.
Here is Tom's new attic with the nice man from the government.



Offline 360c

  • 300kph+ club
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  • Joined: Apr 2006

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thought about this as a possibility with property

You can buy a property and lease it to an unrelated party without any issues. It can get tricky if you try buying it from a related party and/or leasing it to a related party. Business real property is commonly transacted in this manner.
Buying a holiday house and renting it to yourself is the type of thing that can end in tears.
There are all sorts of limitations on buying property using a limited recourse loan as well.



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