• P: 1300 790 110 | E: service@redwoodadvisory.com.au


taking a smsf loan? We have a smsf checklist to help you

The end of the financial year is fast approaching. We will now address some of the key strategies that must be considered pre 30 June 2015.

Self managed superannuation funds (“SMSF’s) are about strategy, and your strategy needs to be compliant with Superannuation Law. A sound SMSF strategy will ensure you achieve the maximum tax benefits for your fund and will improve your retirement balance in the long run. We have identified key strategies and compliance considerations for your in preparation for 30 June.

1. Contributions

Be sure to take advantage of concessional contributions before 30 June. Contributions need to be credited to your SMSF bank account pre 30 June and ensure you have the relevant documentation to ensure the deduction is accepted by the ATO, this will include a Trustee resolution to accept the contribution.

If you are making a non-concessional contribution, check non-concessional contributions made during the previous two (2) financial years to see if the two-year bring forward provision has been triggered. For contribution caps click here.

Exceeding the contribution caps can give rise to tax issues. Therefore, before any contributions are made, check them against the member’s relevant caps and any contributions previously made.

There are many contributions strategies including contribution splitting, spouse contributions, salary sacrifice contributions amongst others.

2. Property Valuation

All SMSF assets need to be recorded at Market/ fair value in your financial statements each year. There are a few options to support market/fair value of a commercial or residential property in a SMSF. This will include an independent valuation or review of the rate notice. Generally the SMSF auditor will require sufficient appropriate audit evidence to support the valuation of the asset. The ATO has released “Valuation Guidelines for SMSF’s”. SMSFs in pension phase must receive an independent valuation each year.


Given the attention on SMSF Property by the ATO & ASIC, be sure to support the valuation and existence of the property particularly if held under a Limited Recourse Borrowing Arrangements (“LRBA”).

3. SMSF Insurance

SMSF are required to consider insurance within the SMSF as part of the investment strategy of the fund. Ensure your investment strategy is up to date as well as your Trust Deed. Ensure your SMSF Insurance is held in the correct name i.e. the fund should be the policy owner not you personally.

4. Related Party Loans

There has been significant discussion over the last 12 months in relation to related party loans specifically the terms of the loan. The ATO has confirmed that zero interest rate loans are not allowed for LRBAs. You may believe that the ATO previously said it was OK however this won’t fly. The loan needs to be at a commercial rate to satisfy the arms length provisions of Superannuation Legislation. Also ensure loan repayments are made in accordance with the signed related party agreement and your lease is signed and up to date.

5. Investment in Overseas (USA) Property

For many years the ATO has warned about the traps of investing in overseas property through your SMSF. During 2015, we have seen the evolution of SMSF borrowing to invest in the USA with USA lenders allowing SMSFs to secure finance. Unfortunately we have seen many errors made by SMSF investing n overseas property, be sure to consider the following:

  • Is the property in the name of the SMSF – if not, is there a ‘Declaration of Trust’ to prove beneficial ownership by the SMSF
  • Is the loan document in name of the SMSF as borrower (i.e. not the LLC)
  • Does your SMSF have a bank account in the USA – if yes, there is a possibility that your fund is in breach of the in-house asset test, contact us for more information to ensure you are compliant (many SMSFs are not).

6. Minimum pension payments

If you have an account-based pension or transition to retirement pension for your SMSF, please ensure you have satisfied the minimum amount to be paid from your SMSF under Superannuation Law by 30 June 2015 to continue to receive tax exemptions. The minimum amount is determined by your age and the percentage value of your pension account balance at either the commencement date of the pension or 1 July each year.

7. Should I have a Corporate Trustee?

To our amazement, over 80% of SMSFs have an individual trustee structure. Redwood Advisory recommends corporate trustee for all our clients. There is a once off cost in setting up a company however the long-term benefit outweighs the cost, read more.

8. Be aware of ATO’s new powers for non-compliance

From 1 July 2013, where SMSF contraventions or non-compliance issues occur, the ATO has implemented a new Penalty Regime for SMSFs, Read more.

9. It’s time to review your SMSF auditor

While considering your strategy, you may also consider a free approach from a leading SMSF Auditor. If you are borrowing to invest in property, the ATO will focus on your fund in the 2016 – it is important to engage a SMSF auditor that understands the ins and outs of SMSF Property – choose Redwood.

We can help!

Don’t leave it to the last minute – review your SMSF strategy now and seek advice from a SMSF Specialist to assist you with end of year superannuation planning. Contact us on 1300 790 110 or service@redwoodadvisory.com.au to get a fresh perspective on your SMSF and GET YOUR SUPER MOVING….

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The content has been prepared without taking account of the objectives, financial situation or needs of a particular individual and does not constitute financial product advice.

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Ivan Filipovic

Ivan Filipovic is an experienced, independent Property, SMSF and Finance Expert and the founder of Redwood Advisory. Ivan has been educating and coaching investors for over 15 years and has built a successful property portfolio with a number of positive geared properties across Australia.  Ivan provides valuable and honest guidance by educating Australians on how to invest successfully protect yourself with knowledge, contact Ivan today for a complimentary consultation on 1300 790 110 or email ivan@redwoodadvisory.com.au

All stories by: Ivan Filipovic

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