Get ASX Price


Latest Financial Planning News
Quarter 1 January - March 2016
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
ATO urges caution on pensions
Market Update - February 2015
Aussie economy shifts gears as structural changes take hold
The catch 22 of retirement savings
Are there reasons to help the tax man do his job?
Some financial terms explained
Small business paradox
Good financial planning finally has a value: 23% more income in retirement
Market Update - January 2015
‘Incredibly high’ number of trustees hold no life insurance
SMSFs in 2015 Budget’s firing line
Rebalancing resolutions
Hammering away at asset allocation is only part of the retirement income solution
Market Update – December 2014
ATO urges caution on pensions

 

The ATO has said the lack of attention being paid to minimum pension payment requirements is “surprising” .......


..... and has urged trustees and practitioners to be wary of their obligations.




       


In 2012, the commissioner agreed to exercise his powers to allow a super income stream to be taken and a fund to continue to claim exempt current pension income (ECPI) where minimum pension payments are not made in certain circumstances.


In an address to a Tax Institute conference, Matthew Bambrick, the ATO's assistant commissioner, SMSF segment, superannuation, noted that an SMSF may self-assess where the underpayment is small, they have not previously self-assessed the exercise of the general powers or they have made a catch-up payment as soon as possible.


In all other circumstances, however, the fund must apply for the ATO to exercise the general powers and must demonstrate the circumstances for the underpayment were outside the control of the trustee, Mr Bambrick said.


“We’ve finalised 242 cases where SMSFs have requested the exercise of this exception and have allowed only 20 per cent. In the remaining 80 per cent of cases, the funds did not demonstrate that the factors preventing payment were beyond trustee control,” Mr Bambrick said.


One example would be if the circumstance was a medical condition, it was not serious and was short term, with no supporting medical documentation.


Another example involved circumstances that prevented payment being made being experienced by one or some trustees, but not all of them. Mr Bambrick noted all trustees are equally responsible for running the fund.


“Be careful in this area. It’s surprising how many SMSFs and their advisers carefully plan the sale of assets, creating capital gains in the first year the member is in retirement but then forget to pay the minimum pension amount, meaning they place at risk the ability to claim ECPI,” Mr Bambrick said.


 


Written by Katarina Taurian
Thursday, 19 March 2015
smsfadviseronline.com.au




31st-March-2015
 

Diamond Financial Solutions
Charter Financial Planning Limited ABN 35 002 976 294
Australian Financial Services Licensee Licence number 234665
Principal Address: 750 Collins Street PO Box 2830 Melbourne Victoria 3001
Legal Disclaimer
Charter Privacy Policy | Financial Services & Credit Guide
Site Map