The Treasury Laws Amendment (2018 Superannuation Measures No. 1) Bill 2019 passed the Senate on Thursday after passing through the House of Representatives earlier this week, meaning the bill now only needs to receive royal assent before it becomes law.
The bill contains a measure to include the value of outstanding LRBAs in a member’s super balance if the loan is from a related party or the member has met a full condition of release, and where the LRBA was entered into from 1 July 2018 onwards.
It also includes further restrictions to non-arm’s length income, meaning income earned at arm’s length can still be taxed as NALI if a member has incurred an expense in relation to that income which was not at arm’s length.
Additionally, the bill introduces an option for high-income earners with multiple employers to opt out of super guarantee contributions for part of their employment.
Commenting on the new laws, Australian Executor Trustees senior technical services manager Julie Steed said affected SMSF members would need to factor their LRBA balance into their total super balance at the end of the last financial year, as well as make changes to their portfolio if needed.
“The inability to make certain additional contributions may be a catalyst for some members to conclude that the LRBA doesn’t suit their needs any longer,” Ms Steed said.
“Some funds may look to sell the asset and repay the loan, and some trustees who currently have diversified holdings which include a property with an LRBA may decide to liquidate cash and shares to pay down their LRBA and retain the property, leaving them with less diversified investments.”
In regard to the NALI changes, SuperConcepts general manager of technical services and education Peter Burgess said trustees would need to be diligent going forward in ensuring any services performed for their own SMSF were provided at arm’s-length rates.
“From now on, to avoid these new NALI measures being applied, trustees who provide services to their fund will either need to be able to show the amount charged for any such services is not less than that which would be expected to be charged between parties dealing at arm’s length, or the service provided was purely internal — for example, where the trustees undertake bookkeeping activities for no charge in performing their trustee duties,” Mr Burgess said.
He added that the changes overall would close the remaining loopholes by which trustees might have been able to circumvent the super reforms introduced in 2017.
Sarah Kendell
20 September 2019
smsfadviser.com
Director
BEc (Acc), MBA, CPA, FFin
David has been in the Financial Services Industry for nearly 30 years. He was one of the founding Directors of the successful Financial Planning and Stockbroking Practice, Henderson Gregory Forrest, for a decade. Prior to that, he held senior roles in companies such as ING, KPMG Accountants and AMP. David was previously Chairman of OAMPS Superannuation Trustee Board and currently serves as an independent Board Director for several companies.
David’s extensive experience in all forms of superannuation, including Self Managed Super Funds (SMSF), Defined Benefit Funds, retirement funding through Account Based Pensions, stockbroking with a focus on Direct Share Investment, Taxation/Remuneration Planning, Centrelink, Aged Care and business management, equip him to advise expertly on all aspects of Financial Advice.
Those with a particular interest in superannuation/SMSFs, direct share investment, salary packaging or applying for the Centrelink Pension will find his knowledge and ability in formulating and implementing creative, logical and simple wealth creation strategies a valuable asset.
David maintains a strong personalised client service focus, providing tailored solutions for clients.
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David Forrest is an Authorised Representative of Integrity Financial (SA) Pty Ltd ABN 16 133 921 187 — AFSL No 334846
Business Finance Manager
B Bus (Acc), CPA
Michelle’s career has spanned across the Financial Services, Retirement Living and Aged Care industries working in the private sector, not for profit and more recently with the state government for over 20 years. Her experience extends to many facets of the financial services industry, having worked in superannuation administration, technical support and financial planning practice administration.
Commencing with AMP and subsequently working in commerce and accounting roles with companies such as Brambles, Adelaide Bank Retirement Services, ECH Inc and SA Health and Wellbeing, Michelle returns to financial services after working in practice financial management at Henderson Gregory Forrest. This wide range of experience from senior accounting and management roles has provided Michelle with a strong background in business administration.
With an astute financial acumen and keen interest in business improvement strategies, Michelle ensures the smooth running of the Integrity Financial Advisory practice providing valued management support to our personalised client service focus.
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Client Service Manager
Jasmine has worked in the financial services industry for over 12 years in all areas of client administration, working with David since 2013.
Jasmine has extensive knowledge and experience in client service including implementation of advice, portfolio reporting, assisting with the establishment of Self Managed Super Funds (SMSFs), term deposit management and a long history of helping clients with their enquiries.
Jasmine’s attention to detail, yet gentle approach, means she is able to solve the trickiest of questions for our client community.
Jasmine has gained her Certificate III in Financial Services qualification.
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Senior Client Service Manager
Merrilyn has worked in the financial services industry for over 11 years in all areas of client administration, and is a new addition to our client services team, returning from Melbourne to join the team in June 2019.
Merrilyn has extensive knowledge and experience in client service including implementation of advice, managed fund administration, assisting with the establishment of Self Managed Super Funds (SMSFs) and process improvement for the previous practices she has worked with. Merrilyn’s experience with direct shares constitutes the other part of our administrative support for direct equity investments.
Merrilyn’s warm and caring nature continues to endear her to our clients and she has already established herself as a valued member of our team.
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