Important Notice to Trustees of Self Managed Superannuation Funds (SMSF)

It is important that you review and where appropriate update the provisions of your SMSF trust deed if you wish to take advantage of the following.

·         Splitting of Member’s Contributions with Spouse

From 1 July 2006, a member will be able to instruct the trustees of a SMSF to split contributions made during the previous financial year between the member and the member’s spouse.

This however will only be possible if the trustees have the power under the trust deed to accept such contributions and to allocate any costs of such splitting between the members.

Your trust deed provisions would need to be updated if this power does not exist and a member wishes to take advantage of this facility.

·         Payment of Pensions from Within the Fund

From 1 July 2007, the payment of a benefit to a member age 60 or over upon retirement will be tax free whether paid as a lump sum or as a pension.

Many members on retirement will however choose to receive at least some of the retirement benefits in the form of a pension to take advantage of the concessional rate of tax payable on the income from the trust assets and also any possible capital gains.

Many trust deeds provide that benefits may only be taken as a lump sum or by purchase of a pension or annuity from a financial institution offering such a facility.

To gain the benefits referred to above the trust deed must give the trustees the power to pay a pension from within the fund.

Your trust deed provisions would need to be updated if this power does not exist and a member wishes to take advantage of this facility.

Please contact Corp Reps to discuss our prompt and cost effective trust deed updating service on (02) 9437 5344.