Thrifty
About ThriftyThrifty NewsThrifty Membership ApplicationRecognition & Rewards ProgramThrifty Order FormsThrifty Online PaymentsWebFileFrequently Asked Thrifty QuestionsLinksContact Thrifty

Thrifty News

Welcome to Thrifty-Net, the internet service you can access 24 hours a day, 7 days a week to order any of our services.

Superannuation Funds Can Now Borrow
Complete Package Available Now

 
Recent changes to superannuation law mean that self managed superannuation funds (SMSF) are now permitted to borrow money.  New section 67(4A) of the Superannuation Industry Supervision (SIS) Act allows SMSFs to borrow to invest in limited circumstances.

The limits are:

  • the borrowed money must be applied to the acquisition of an asset
  • the loan must be a limited recourse loan, so the lender’s security is limited to the assets bought using the loan and in particular doesn’t extend to other assets of the SMSF
  • the asset must not be an in-house asset or other asset not permitted under the superannuation law eg a loan to Member or property acquired from a Member
  • the asset must be held on trust for the SMSF so that the SMSF has a beneficial interest in the asset
  • The SMSF must have a right to legally acquire the asset on payment of one or more instalments.

Other sections of the SIS Act must still be complied with such as the sole-purpose test, Investment Strategy requirements, related-party acquisition rules, in-house asset rules, prohibition against charging and arm’s length dealing requirements.

The changes mean that funds now have effectively far greater ability to grow their assets at a time when strict limits are imposed on making both deducted and undeducted contributions.

A superannuation fund, for example, can buy real estate.  Previously a fund may not have had sufficient funds to do this however using money the fund has, as a deposit, the fund can then borrow the balance needed.

The fund could borrow the money from a third party. Alternatively the fund could borrow from a related party.  For example, it could borrow from the Member (or a related party) who has funds that the Member could lend to the superannuation fund therefore enabling the capital appreciation of the asset to be taxed at concession rates in the fund (or not taxed at all if the fund is in pension phase).

A Member could use their own funds or borrow from the bank. The Member would then lend the money to the fund at an interest rate. The growth in value of the asset that has been purchased will be in the superannuation fund and concessionally taxed, if taxed at all.

The asset that is being purchased that will be beneficially owned by the superannuation fund must stand in the name of a Trustee of a trust that holds the asset on behalf of the superannuation fund. The asset cannot be held in the name of the superannuation fund and must be held by separate Trustees for the Trustees of the superannuation fund.

We have had our lawyers prepare a complete set of documents including Trust deed/Loan Agreement and Minutes of Meeting to assist accountants who want to take advantage of the new legislation.

The documents are suitable only where the lender (and the other parties to the documentation) are willing to use the loan agreement (and other documentation) that is included. A lender who is in the business of lending money usually requires their own documentation and is likely to have rules and requirements as to payment of fees and interest and other requirements before lending. You should not use this service without the lender’s agreement to accept these documents. 

 

  • You should consider taking independent advice from the holder of an AFS licence before making a decision on any financial product and before making any financial decisions including advice as to the cost of borrowing from a third party lender compared with the costs of borrowing from a member of the fund or other associated person or entity.
  • We are not licensed to provide financial product advice;   
  • Taxation is only one of the matters that must be considered when making a decision on a financial product.

Click HERE to view a sample of the Deed.

Click HERE to read ATO questions and answers - Instalment warrants and super funds 

Click HERE to read Taxpayer Alert TA 2008/5 

New Superannuation Deed Update Service

To take advantage of the new Simplified Superannuation legislation Thrifty now provides a comprehensive deed update service.  To place your order for a Fund update log in to Online Ordering and select Superannuation Fund Update from the Services menu .
 
Hybrid Trusts

Thrifty now offers Hybrid Trusts.  Hybrid Trusts may be appropriate in many cases for tax planning, estate planning, asset protection and other purposes.  Some of the key features include:

·    Units may be redeemed.

·    There is a pre-emption provision in relation to the transfer of units.

·    Income streaming provisions are included.

·    Provisions for distributions of capital and income in proportion to units held with provisions to stream income to the wider class of discretionary beneficiaries.

·    The wider class of discretionary beneficiaries includes (as defined in the deed) related persons, companies and trusts.

·    Provisions for reserves.

·    Broad trustee powers.

·    The discretionary beneficiaries are not entitled to any trust assets or income unless the trustee of the hybrid trust exercises discretion for their benefit.

 New Loyalty Program


Thrifty rewards its clients with a gift of 6 bottles of quality wine with their first purchase of a company, trust or self managed superannuation fund and then continues to allocate bonus points so that after every 6 purchases a further gift pack of wine will be sent to you. If you prefer merchandise other than wine, click on R&R in the main menu for full details of our Recognition and Reward Program.

Privacy Guaranteed

We know that confidentiality and privacy are of the utmost importance. That’s why our Thrifty-Net service uses the latest security to ensure that only you can gain access to your data files and charge orders to your account. Privacy Statement.