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SMSF Strategies for 2009

Are you eligible for Govt. Pension?


Company Formation $455 - Instant Email

 

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November 2008
 Issue 26 of 2008 
 
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SMSF Strategies for 2009 : Seminar

Since the 9 May 2006 Federal budget, superannuation has become the most tax effective vehicle for wealth accumulation, asset protection & estate planning. Superannuation is becoming the first or second largest asset for most individuals.

This ATMA professional development group presents a great opportunity for advisors to learn how interesting strategies can be structured so that they can assist their clients to maximize their retirement benefits.


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Strategies covered

  • How to get more money into super
  • Why paying off principal of your own home loan could be the worst decision you would ever make
  • How a 50 year old can pay only 4% interest on own home loan
  • Instalment warrants Vs joint venture Unit trust arrangement
  • Preservation and conditions of release requirements
  • Re-contribution strategies - are they still alive
  • Splitting super with spouse
  • Transition to retirement pensions
  • How 75 + year olds can contribute into super
  • Other interesting and complex strategies


speaker

Manoj Abichandani

SMSF Specialist Advisor
SMSF Specialist Advisor


Manoj has worked in the SMSF industry for
the past 19years and currently audits more than 250 funds. He develops SMSF strategies and advises accountants on complex SMSF matters.




Cost of seminar is $55 and for ATMA members $44, to book click here




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Age Pension
Are you eligible?

About 80% of all retirees or about 2 million Australians receive age pension or part age pension, which means, for survival, they depend fully or partly on government pension.

Rules for claiming pensions were changed in September 2007, which meant about 300,000 more retirees, may become eligible for a part pension for the first time and some could get a greater part pension.

The government has relaxed asset and income tests thresholds, which means that with higher CPI (special living cost index for age pensioners) a higher number of pensioners are likely to be eligible for age pensions or greater part pension due to downturn in the share market. Call it a silver lining for those who have invested via their SMSF and lost in the share market.

Some retirees would be looking to draw down on capital value for survival as values of their portfolio drop. Some pension funds with low cash reserves will be forced to sell shares to make compulsory pension payments. One option could be to close (commute) pension account and revert back to accumulation phase and rely on assets outside of super (if any) - provided the trust deed allows this roll back to accumulation phase (ours does).

Note that super fund income could be liable for tax on earnings but at least, no forced sales of assets will be required for compulsory pension withdrawals.
 

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Negative taxable component

We are living in interesting times, due to dramatic fall in the stock market, it is now possible to have a large tax free component whilst a negative taxable component in a super fund.

Negative taxable component is possible in a situation, when the trustee contributes say $500K of their own money (Tax Free component) and no taxable component say in January 2008 and purchases bank shares, which were valued at say only $400K on 30th June 2008 - this loss creates a negative taxable component of $100K, whilst tax free component stands at $500K.
 

More retirees could be eligible for part pension

To receive full pension your assets have to less than $171,500 for single and $243,500 for a couple. Single pensioner will lose $1.50 pension for every $1000 of assets above the threshold (excluding their own home), which means that if you are single and have assets of more than $540,250 you will receive no pension (couple $856,500).

A non home owner threshold is
$296,250 and can have assets of $664,750 (couple $981,000)
To receive full pension your income has to be less than $3588 for single and $6240 a year for couples. Single pensioner who is a home owner can earn up to $1519.50 per fortnight before all pension is lost whereas a couple can earn up to $2538.50 per fortnight before part pension is stopped.
 
Note: the rate of pension payment is calculated for both the income and assets tests. The test that results in the lower payment, that rate applies.
 
We believe a larger number could be eligible (but are not claiming) due to downturn in the stock market, it is likely that after accounts are prepared for 30th June 2008, the asset value of many retirees may have dwindled further, making them now eligible for age pension or greater part pension for the first time.


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For example
 
David is aged 65 and he starts an account-based pension with a $300,000 account balance. His exempt amount is:

Purchase price ($300,000)/Life expectancy (17.7 years) = $16,949.

If David decides to withdraw $10,000 from his income stream, then the income counted against the age pension income test is (-$6949) ($10,000 less $16,949). Under the income test, David is entitled to the full age pension as his income is lower than $3588.

David must also satisfy the assets test. Assuming he has no other assets, he is allowed a threshold of $171,500 to receive a full pension, however his pension balance is $300,000 - he losses $1.50 for every $1000 above this threshold. Since the asset test gives a lower pension, the asset test will apply.
 
With current rates David is entitled to a part-age pension of $345.05 a fortnight or $9205 a year. This gives him a total income of 19,205 per year.
But if there is dramatic fall in assets after 30th June 2008, David could be entitled to higher pension.

If you think you may now be eligible for a part age pension, you need to apply for the benefit: you don't receive it automatically. Visit the Centrelink website for more information.

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www.trustdeed.com.au provides online service for creating, storing & managing legal documents for Companies and Trust deeds for SMSF, Family, Unit & Hybrid Trusts, click here for more information.

New / Update SMSF Trust Deeds cost only $110 and can be created in 20 minutes, Trust Deeds are emailed instantly! 
 
 
 

FIRST TRUST DEED  FREE

if you are an advisor, financial planner, accountant or a solicitor, we can offer you to create one trust deed on our system for free. This offer is valid provided you purchase 10 or more new SMSF deeds or update 10 SMSF trust deeds for your clients. To claim your first free trust deed, first  register on our website www.trustdeed.com.au and phone our office on 02 9638 2807 for a promotional code.
 
If want to communicate with your clients, advising them the need & advantages to update their trust deed, click here to download a pro-forma letter to your clients.
 
Register Now                                                                        
 
remeber you can create a SMSF trust deed at any time 24 / 7
www.trustdeed.com.au
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If you are an advisor and use our website for your clients SMSF SMSF Specialist AdvisorTrust Deed. You now have access to SMSF Specialist Advisor who will answer all your technical questions online for you. Simply click the button above and start chat.

New or update your existing SMSF Trust Deed for $110 You can keep the trust deed up to date for the next five years for only $165.

Our SMSF trust deed has been prepared with input from accountants who have over two decades of experience in setting up structures for their clients and have combined knowledge of auditing and lodging tax returns for more then 2000 SMSF's, their practical experience is an invaluable contribution.

For further questions on our trust deed, ring 02 9684 4199 or email [email protected]

Our Website has complete Document manager for all future downloads

We are the only online SMSF Trust Deed providers where you can purchase a Trust Deed 24/7 for $110

It takes only Less then 20 minutes to register and build a SMSF Deed.



Phone 02 9684 4199  or visit www.trustdeed.com.au
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In This Issue
SMSF Strategies for 2009
Age Pension - Are you eligible?
Live Online Help
How our Web Site works
Additions to our website


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Additions to our Website

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1st October 08 :

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1st Decmber 08:
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