News & Views
Herald Sun "Take control of nest egg"
ANTHONY Keane examines the basics of starting a self-managed super fund.
The fastest-growing slice of our retirement savings sector also can be the most dangerous for people who don't play by the rules.
Self-managed superannuation funds have enjoyed spectacular growth over the past decade, yet tough penalties enforced by the Australian Taxation Office can wipe out half your nest egg if you deliberately flout the SMSF laws.
Hewison Private Wealth director Chris Morcom says Aussies love DIY. "We like to think we're all experts the renovation statistics show that," he says.
But beware of penalties
Before starting an SMSF, it is crucial to seek independent advice and to understand the harsh penalties that apply if you get it wrong. "The main penalty that scares everyone, and should scare everyone, is the risk of losing half your super if you are running as a self-managed fund and are deemed to be non-compliant," Morcom says.
The ATO can treat your fund balance as income and apply a penalty tax at the top marginal tax rate. "If you have $1 million you can lose $470,000 of it," Morcom says. "That's why people running a self-managed fund need to make sure their fund is complying with the rules." These rules include not using your SMSF assets for personal use. If it's a property you can't live in it, if it's a painting you can't hang it on your wall and if it's an antique car you can't drive it.
You cannot withdraw money from your SMSF to pay personal debts or other loans. It's locked away, just like traditional super.
This article also appeared in Herald Sun, Daily Telegraph, The Mercury, Townsville Bulletin, Cairns Post, Adelaide Advertiser, www.news.com.au Online and page 29 in the Herald Sun Money section
Posted: 30th January 2012
Written By: Anthony Keane featuring Chris Morcom
Herald Sun "Take control of nest egg"
-
Shorten’s ban on asset transfers a gamble for SMSFs
New rules announced within the latest Stronger Super reforms package, banning self-managed super funds (SMSFs) against making in-specie asset transfers, will disadvantage SMSFs and exposes them to greater costs and risks, warns Hewison Private Wealth.
John Hewison, CEO of Hewison Private Wealth, said while the move to introduce MySuper and cut costs for superannuation members has been... -
Market volatility continues as expected but there are some very positive signs coming out of Europe and the US. This should go a long way towards bringing some stability and confidence in global share markets which we expect would have a direct influence on our markets in Australia.
-
Renovated super tax laws to boost property appeal for SMSFs
The “renovation” of the laws surrounding borrowing in super and property is a welcome development for Self Managed Super Fund (SMSF) members who will now be able to upgrade properties owned within their superannuation fund, but there are boundaries investors must beware of, according to Hewison Private Wealth.
-
Global markets were sold down aggressively overnight in response to lingering concerns over the European sovereign debt issues and a slower than expected economic recovery in the US. Our market has responded accordingly falling around 4.2% at midday.
-
Sydney Morning Herald "Super nest egg takes a direct hit"
A lower cap for concessional contributions takes the wind out of a popular tax strategy.
The lowering of the cap on salary-sacrifice contributions to super from $50,000 to $25,000 for those aged over 50, announced in this week's federal budget, could prompt an exit from one of the most popular strategies recommended by financial planners
-
Advisor Voice "Businesses get FoFA ready"
When stepping back from the daily FoFA headlines, what is really happening on a daily basis with businesses as they ready themselves for the latest round of legislative reform?
-
Wealth Professional On line "How to make money from giving"
Hewison Private Wealth director Chris Morcom said high-net-worth clients appreciate their trusted adviser taking the time to find out about their charitable interests and their desire to give something back if they can. In fact, these clients are increasingly likely to actively seek professional financial advice before making decisions about their charitable giving, and they’re happy to pay for ...
-
Money Magazine "The top three things you need to know - Death and Super"
Simon Curtain, Director and Private Client Adviser at Hewisons says that many people incorrectly assume that their Will dictates how their superannuation will be paid upon death. Your superannuation does not automatically form part of your estate upon death and therefore may not be covered by your Will at all.
-
What is Asset Allocation?
Asset allocation is the percentage allocation of investment funds to the various investment classes, the main ones being –
· Cash
· Real estate property
· Australian shares
· International shares
· Fixed and variable interest
-
From the CEOs Desk - 2011 June Issue # 36
It has certainly been a long hard slog for investors with the Australian sharemarket remaining flat despite all the positive economic indicators. We have low unemployment, a booming resource sector, apositive GDP outlook as forecast by the International Monetary Fund and the Reserve Bank. So why isn’t our share market booming? Major global share markets have recovered despite their economies co...
-
Are the good times over for property? June issue # 36
Over the past ten years Australians have experienced a residential property super cycle where values have increased considerably over this period. The main drivers of this meteoric rise have been historically low interest rates, low unemployment, government grants for first home buyers and the strongest terms of trade seen in 140 years. The only hiccup during this period was from late 2007 through...
-
Economic Update - 2011 June Issue # 36
While many thought that the world markets would recover strongly over 2011 it seems we have been stuck in a rut over the past few months with most investment markets tracking sideways.
While markets are often driven by fear and greed we cannot ignore the underlying economic factors that also serve to drive investment markets on a global scale.