Question:
Bring your kids into your super fund? Perhaps not
Answer:
Recent changes are outlined below:
July 1, 2022
- Loss carry back for eligible companies extended to cover 2023 income year.
- Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
- Corporate collective investment vehicle legislative regime introduced.
- Temporary full expensing of depreciating assets extended to include 2023 income year.
- Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.
December 9, 2021
- Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.
August 5, 2021
- COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.
July 1, 2021
- New Investment Engagement Service launched for businesses planning significant new investments in Australia.
- Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
- Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
- Self-managed superannuation funds can now have six members, increased from four members previously.
July 1, 2021
- Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
- Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.
March 31, 2021
- JobKeeper payments scheme ended.
October 5, 2020
- Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.
June 4, 2020
- Homebuilder grant for new home or substantial renovation construction is not subject to income tax.
April 1, 2020
- COVID-19 cash flow boost payments are not subject to income tax
Unforseen problems can arise if your grown up children become part of your self-managed super fund.In July last year, DBA Lawyers argued against bringing your children into your super fund quoting two key cases.
In Triway Super Fund, a mother, father and son were members and trustees of the fund. The son was addicted to drugs and withdrew all of the funds such that the parents’ retirement savings were lost. The son became bankrupt and a couple of years later the trustees made a voluntary disclosure to the Tax Office.
The Tax Office issued a notice in 2009 stating that the fund was non-complying because the trustees had contravened the sole purpose test, financial assistance had been provided to a member and a bankrupt was in the position of trustee.
Although feeling sorry for the parents’ loss of retirement savings, the Tribunal upheld the Tax Office decision.In a 2005 case known as Katz v Grossman a father appointed his daughter as a trustee and member of a super fund. There was a son who was not appointed but there was a non-binding nomination sharing the superannuation death benefit equally between the son and the daughter.
The father died and the daughters’ husband was also appointed as a trustee.
The daughter had effective control of the fund and presumably exercised the discretion under the non-binding nomination to pay all of the benefits to herself and none to her brother.
The brother challenged the appointment of trustees but was defeated in the Court.
Triway Superannuation Fund v Commissioner of Taxation [2011] AATA 302, Katz v Grossman [2005] NSWSC 934, Bryce Figot, Tina Conitsiotis, DBA Lawyers, Taxation in Australia, July 2011
