March 2016 Edition

In this edition:

Welcome

Change in legal structure - New small business CGT rollover relief

SMSF Trustees cautioned over spike in SMSF cash allocations

Main residence exemption when you own two homes - six month rule

SMSF compliance: Insured "lifestyle" assets under data mining microscope

Further to our Newsletter article published last month "ATO data matching to identify wealthy individuals" the insurer data being harvested also has a focus on SMSF compliance with one of the main focuses of the program being to ensure investments are made for genuine retirement savings purposes, otherwise known as the 'sole purpose test'.

From July 1, 2016 all SMSF collectibles and personal use assets held by the fund must adhere to six rules.

1. The asset (or interest in the asset) cannot be leased to a related party.
2. The asset cannot be stored in the private residence of a related party of the fund.
3. Decisions regarding asset storage must be documented and kept for 10 years.
4. Assets (other than a membership of a sporting or social club) must be insured in the SMSF trustee's name, regardless of its value or insurability.
5. The asset cannot be used by a related party.
6. If the asset is sold or transferred to a related party on or after July 1, 2016, it must be done at market value as determined by a qualified independent valuer.



It is critical for SMSF trustees to know that the collectible rules override the "incidental use" concessions granted under the sole purpose test which means that members and related parties of the fund cannot enjoy any benefits, no matter how immaterial or incidental, from these investments.

Please contact the Goodwin Chivas Team if you require assistance with meeting the above rules in your SMSF.