SMSF trustees and their advisors are now facing interesting situations. Below are 10 such situations which will not only challenge their knowledge but also dare them to learn more.

Prize: If you are first to get them all right answers, you will be crowned as "trustdeed.com.au SMSF advisor for 2012 year" and you receive a gift voucher which entitles you to 4 nights of free stay at Gold Coast water front 2 bedroom furnished apartment of our choice. The stay is from 21^st May to 24^th May 2012. Winner will be provided further details.

Send your answers to sales@trustdeed.com.au before 10^th May 2012 and remember to qualify for a valid answer, it must be supported by correct at least 1 line explanation. Feel free to pass the quiz to other staff in the office.

Let the game begin......

Question 1.

Roger and Mary are directors of a corporate trustee of their SMSF. Roger is 63 years old and Mary is 67 years old who is Roger's tax dependant. Roger is drawing an account based pension which is non-reversionary. He dies on 23^rd September 2011 and has not withdrawn any pension from 1^st July 2011. Would this pension be considered as having met the minimum pro-rata withdrawal standard?

1. Yes, Why?
2. No, Why not?

Question 2

Would your answer be different if the pension was a reversionary pension?

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Question 3

Rogers situation is as per question 1 dies had $100,000 on 1^st July 2011. He had a reversionary pension which on his death on 23^rd September 2011 was reverted to Mary. Before his death he withdrew $1250 as pension.

Mary wants to withdraw the lowest amount before 30^th June 2012 to maintain the minimum pension standard, what amount should she withdraw

A. $2,500

B. $1,750

C. $3,750

E. $2,750

Question 4

Roger as per situation in Question 1 had a non-reversionary pension; he dies on 23^rd September 2011. He had $100,000 on 1^st July 2011 in his pension account; he did not withdraw or contribute anything from his account in the financial year before his death. Assume his spouse Mary is 47 years old instead of 67 years old in Question 1.

Which of the below payments will not be considered as a death benefit lump sum payment.

1. $100,000 on 26^th December 2011
2. $100,000 on 26^th April 2012
3. $50,000 on 1^st October 2011 + $50,000 on 3^rd January 2012
4. $50,000 on 1^st October 2011 + $40,000 on 3^rd January 2012 + $10,000 on 10^th January 2012

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Question 5

Assume instead of Roger dying in question 1, he becomes bankrupt 23^rd September 2011. He has withdrawn $1,250 from 1^st July 2011 to date of bankruptcy. After becoming bankrupt can trustee of the SMSF, on request from Roger, roll back his Pension to accumulation phase to save the income stream from the hands of creditors?

1. Yes, Why?
2. No, Why not?

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Question 6

Further to question 5, by what date must the corporate trustee of the SMSF remove Roger as director / member of the fund.

1. 23^rd September 2011
2. 24^th September 2011
3. 22^nd March 2012
4. 22^nd December 2011

Question 7

James is a 48 year old unmarried businessman and owns a profitable company and runs his own SMSF with a corporate trustee. On 10^th Jan 2011 his company makes a concessional contribution of $25,000 for him. On the advice of his client, his company makes a further $25,000 concessional contribution on 3^rd June 2011. This amount is put in a contribution reserve account. While preparing 30^th June 2011 accounts, $600 gross income is allocated to this reserve account by the accounting software and the tax return is audited and lodged.

If the intention is to close the reserve account and allocate the reserve to the only member (James) in July 2011, how much will be credited from the reserve account to his account.

1. $25,000
2. $25,600
3. $21,760
4. $21,250
5. $25,510
6. $21,850

Question 8

Based on the facts in question 7, will James be liable for excess contribution tax in the financial year 20010 - 11?

1. Yes, Why?
2. No, Why not?

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Question 9

Based on the facts in question 7, will James be liable for excess contribution tax in the financial year 20011 - 12?

1. Yes, Why?
2. No, Why not?

Question 10

Rony is a builder, but watching his friends make easy money on the stock market decides to set up a SMSF and roll over all his existing super, $100,000 and open a Contract for Difference (CFD) account with a stock broker. In his first trade, he goes big on a mining company and loses the entire balance. All the money is wiped out plus he owes the broker $4,000 in interest fees.

Can a SMSF have a negative balance for Rony?

1. Yes, Why?
2. No, Why not?