Heffron's experts provide a regular stream of thoughts, hints, tid-bits and technical articles to the SMSF industry at large. You can find these below.
In the new world of calculating exempt current pension income, if your 100% pension fund receives a contribution, and a new pension is commenced with that amount immediately on receipt, do you need an actuarial certificate?
Under the scheme, the employee is able to take up the entitlement themselves or nominate an associate to take up the share entitlement. If his SMSF were to take up the shares, what would be the consequences from a superannuation perspective?
Potentially, but this will depend on why your client is receiving the lump sum, their age, the amount paid and the components of the lump sum.
The methods available for obtaining Total Superannuation Balance and Transfer Balance Cap information depend upon whether or not you are the individual’s tax agent.
Historically this question has been difficult to answer. While there does not appear to be any restriction in the Superannuation Industry (Supervision) Act or Regulations (SIS) which would prevent a person acting under an EPOA from completing and signing a BDBN, until recently there has been no legal authority confirming the situation.
However, in a recent case, the Supreme Court of Queensland has confirmed that an attorney has the power to make, renew or extend a BDBN on behalf of a member [Re Narumon Pty Ltd [2018] QSC 185].
When will the unallocated amount first count towards his Total Superannuation Balance?
Given such action is now contrary to the ATO’s new position expressed in SMSF Regulator’s Bulletin 2018/1, is the ATO likely to take action in relation to the fund?
The TBAR system revolves around the reporting of “events”, hence the name “events-based reporting”.
The reversion of the pension will not count towards your client’s Transfer Balance Cap until the first anniversary of his wife’s death (ie August 2018). However, the “event” which triggers reporting is not the counting of the pension towards the cap but rather the reversion of the pension in August 2017.
Your client became the “owner” of the pension on the day of her husband’s passing. This means the value of the pension counts towards her Total Superannuation Balance immediately in March 2018 (although remember that Total Superannuation Balance isn’t actually used for anything other than as at the end of a financial year).
And is the minimum pension for the current year recalculated on his 65th birthday?
Whilst a TRIS automatically becomes a retirement phase pension on the recipient’s 65th birthday, it doesn’t automatically become an account based pension.
It depends on whether the pension reverted (continued automatically) to a reversionary beneficiary such as the spouse on death or stopped.