The Turnbull government announced a series of changes to the Self-Managed Super Funds or Self-Managed Superannuation Funds.The changes to Self-Managed Super Funds were in July 2016 for personal assets. It is important to understand how they affect you as a working person in Australia.
What is insuring your Self-Managed Super Fund?
An insurance policy is bought to safeguard your fund, essentially. This provides protection for the members of the policy. If the Self-Managed Super Fund is insured on the behalf of the holder rather than the holder purchasing the policy outright, it will only be taxed at the 15% super contribution rate. Finally, if the insurance policy is paid from the existing funds in the Self-Managed Superannuation Fund rather than elsewhere, the policy owner will not need to fund the policy themselves.
What are the changes to insuring your Self-Managed Super Funds?
The changes include:
- If you bought a tangible, collectable or asset for personal use for the Self-Managed Super Fund, you must have insured the asset by the 30th June under the name of the fund.
- Any new asset bought for the Self-Managed Superannuation Fund must now be insured under the same name within 7 days.
- Any Self-Managed Super Fund asset or investment cannot be used by any other party except for the persons included in the insurance policy. For example, if a vintage car is under the Self-Managed Superannuation Fund, it cannot be driven by anyone else except the policyholder.
- Any assets under the Self-Managed Superannuation Fund cannot be stored or displayed by any other related party except the policyholder.
How to prepare for these changes:
Some good advice would be to review your lease agreement and insurance policies and make sure your policy is up to date, having included any new assets since 2011. See more here!
What were the other changes to Super Managed Super Funds in July 2016?
From July 2016, an accountant must be an Australian Financial Securities Licensed-approved (AFS) in order to set up an SMSF. This may turn out to be more expensive for you if you previously used a more general accountant as the AFS approved account has to provide a Statement of Advice (SOA) which costs $2000-$4000 to provide, which can cost more than opening a Self-Managed Superannuation Fund.
The advantages of this is that an AFS approved accountant can help you set up anSelf-Managed Super Funds, advise whether to start or stop any other pension-related funds and investment strategies. They can also help advice on insurance to take out for your Self-Managed Superannuation Fund.
The changes to your Self-Managed Superannuation Fund are important if you have personal effects or assets. They need to be under the same name as your fund, can’t be used by related parties and can’t be displayed by related parties. Your accountant also now must be AFS approved before helping you with your Self-Managed Superannuation Fund. Make sure you comply and you can profit from your Self-Managed Super Funds.