Dooley Blog

Self Managed Super Funds (SMSFs) are becoming increasingly popular as more and more people become disenchanted with the performance of their retail super funds. This has been aided by the federal government supporting a growth in SMSFs in recent years by enabling SMSFs to borrow to acquire certain assets. Of course of all of this has been in an attempt to fund our aging population and move them away from reliance on social welfare payments in their retirement.

With the change in the rules of SMSFs being able to borrow funds to invest there has been a rapid growth in SMSFs buying real estate. An important tip that we often see people overlook is to ensure that there is proper verification of the ownership of the assets by the SMSF. In NSW it is not possible to register a property in the name of a trust – it must be in the name of the trustee. Accordingly to ensure that your SMSF is compliant and can properly establish its ownership of the assets.

The most prudent way to achieve this with property is to have the SMSF lodge a caveat over the property and/or have a declaration of trust document executed regarding the specific property. This can sometimes be overlooked when acquiring the property and can cause significant problems (including taxation consequences) for the SMSF if it is not done.

Anyone who is considering or has a SMSF should ensure that they are receiving appropriate legal, financial and taxation advice about the set up and management of their SMSFs. If you are thinking about an SMSF or already have one and would like some assistance with it please contact us.

From the 1 July 2013 the Government will be increasing the current guaranteed superannuation from 9% to 12%. Australian workers will benefit from the scheme as a result of recommendations made in the Henry [Tax] Review which will see the guaranteed Superannuation contribution rise annually from 1 July 2013 through to 2019-2020.

In the face of an aging Australian population, the push for the increase to superannuation has been to heighten national savings in effect increasing future retirement incomes. Approximately 8.4 million employees are anticipated to benefit from the scheme after an initial cost of $2.4 billion in order to implement the scheme.

The move by the Government to amend super payments in Australia has been green lighted as an alternative reducing tax breaks as this measure will directly stimulate private savings. Approximations made by the Government see the reforms to create superannuation savings in excess of $85 billion over the next decade.

What does this mean for businesses?

Understandably this will impact employers. To limit the impact of the changes the Government has seen to stagger the rises in compulsory superannuation contributions over several years.

Treasure Wayne Swan has been quoted as saying that these changes are the largest since the introduction of compulsory superannuation in 1992. Arguably negotiations between employer and employees will be effected as a result the Government has seen to postpone the introduction of the reform for three years until 2013 in order to allow both parties time to accommodate to the projected changes. It arguably stands to see whether these changes will benefit the future of Australia and limit individuals bargaining power.

Only time will tell whether the costs associated with the amendments to the superannuation scheme will have the intended outcome for future Australians and retirees. Yet, it is arguably a preliminary solution to improve Australian savings in the future and certainly further recommendations made by the Henry Review including the removal of tax on super contributions would be further steps towards building Australian private savings.

If you wish to read more on the projected changes to superannuation follow this link.

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