I knew with all the recent changes to Superannuation that many of my clients would need to update their SMSF Trust Deeds and started doing my research for a blog. Then I came across a recent blog from Dr. Brett Davies at Legal Consolidated today and I could not really improve on it. So with his permission, I am re-blogging his content here.

Self-Managed Super Fund (SMSF) Deeds previously required updates in:

–   1999 – ‘Excluded Funds’ became ‘Self-Managed Super Funds’, preservation & in-house assets

–   2007 – ‘Simpler Super’

–   2017 – Legislation passed in 2016, requires the changes below

The 15 changes to SMSF Deeds required after the 2016 Budget are to:

1.  Internally ‘rollback’ pensions to accumulation;

2.  Segregate assets between accumulation and pension phases;

3.  Reject contributions;

4.  Refund contributions;

5.  Deal with excess transfer balance tax and excess non-concessional contributions;

6.  Allow income streams and Account Based Pension (grandfathered);

7.  Specify guardians for incapacity and death;

8.  Identify the Power of Attorney when living overseas for more than 2 years;

9.  Resettle pensions with flexible timing without mingling with accumulation account;

10.  Allow reversionary beneficiary nominations;

11.  Provide for CGT relief;

12.  Deal with segregated and unsegregated assets;

13.  Cease or keep Transition to Retirement Income Streams;

14.  Calculate member balances, across different funds; and

15.  Calculate internal pension rollbacks to accumulation.

These SMSF updates are all required to give maximum flexibility to your accountant and adviser.

Why does my SMSF Specialist Advisor / Accountant want to apply these SMSF updates?

Pre-2012 SMSF Deeds fail to deal with these 10 issues:

1. Removing clauses requiring the Trustee to do something that is no longer legal or beneficial;
2. Changing the sections that are ‘regimented’ with unnecessary rules vs being ‘permissive’. There is no point stating mandatory SIS requirements. In fact, it is dangerous to re-state legislation. This is because it dates your deed;
3. Accounting for an increased concessional contribution cap;
4. Removing insurance cover where the conditions are out of date;
5. Incorporating clauses about losing the pension at death or when the minimum payment has not been made;
6. Allowing for excess concessional contributions taxed at member’s marginal rate (-15% offset);
7. Updating the Investment Strategy to incorporate the ATO’s new Audit approach;
8. Changing market valuation clauses to leave the mechanism for the Accountant;
9. Allowing remuneration for non-trustee duties; and
10. Allowing non-lapsing Death Benefit Nominations.

Update your Deed to ensure your SMSF is compliant. Then you get the most out of your SMSF.

There is no risk of resettlement

‘Resettlement’ is when you create a new ‘trust estate’ out of an old trust. This applies to SMSFs and causes significant tax implications. However, there is no risk of resettlement under the High Court authority of Commercial Nominees (2010).

Updating your SMSF Deed through Legal Consolidated does not result in the resettlement of your SMSF.  We retain the parts of the old Deed that are required by legislation and previous court decisions. But this does not affect a resettlement.

Make sure to check your with your own current deed provider or ask your adviser to check out Legal Consolidated’s offer.

Looking for an adviser that will keep you up to date and provide guidance and tips like in this blog? Then why now contact me at our Castle Hill or Windsor office in Northwest Sydney to arrange a one on one consultation. Just click the Schedule Now button up on the left to find the appointment options. Do it! make 2016 the year to get organised or it will be 2026 before you know it.

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Liam Shorte B.Bus SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

Tel: 02　98941844, Mobile: 0413 936 299

PO Box 6002 BHBC, Baulkham Hills NSW 2153

5/15 Terminus St. Castle Hill NSW 2154

Corporate Authorised Representative of Magnitude Group Pty Ltd ABN 54 086 266 202, AFSL 221557

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