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  SuperannuationStrategies      Monday, 1 March 2021  

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Superannuation Strategies


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Paying a pension in specie - CGT Exemption lost
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The tax exemption for capital gains made when a Superannuation Fund is in pension mode, does not apply when the capital gain occurs as a result of paying a pension in specie.  Normal accumulation mode tax rates apply to an asset paid out in specie.

To avoid this, the member can purchase the asset from the Pension Fund and then the Pension Fund can use the cash proceeds to pay the pension.



   
How Tax effective are your contributions?
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Regulation 4.09 (2) and (3)
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Considerations in formulating strategy

(2) The trustee of the entity must formulate, review regularly and give effect to an investment strategy that has regard to the whole of the circumstances of the entity, including, but not limited to, the following:

a. the risk involved in making, holding and realising, and the likely return from, the entity’s investments, having regard to its objectives and expected cash flow requirements;

b. the composition of the entity’s investments as a whole, including the extent to which they are diverse or involve exposure of the entity to risks from inadequate diversification;

c. the liquidity of the entity’s investments, having regard to its expected cash flow requirements:

d. the ability of the entity to discharge its existing and prospective liabilities;

e. for a self-managed superannuation fund – whether the trustees of the fund should hold a contract of insurance that provides insurance cover for one or more members of the fund.

(3) An investment strategy is taken to be in accordance with subregulation (2) even if it provides for a specified beneficiary or class of beneficiaries to give directions to the trustee where the directions;

a. relate to the strategy to be followed by the trustee in relation to the investment of a particular asset or assets of the entity: and

b. are given in the circumstances covered by regulation 4.02


   
ATO Issues with Investment Strategies
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This page was last edited on 6 February 2021

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