Disruptor Debate. Aaron Dunn, Managing Director, The SMSF Academy

Transcription

1 Disruptor Debate Aaron Dunn, Managing Director, The SMSF Academy

2 How different does it look today to 5 years ago?

3 Regulatory reforms, legislative change, technology are all redefining SMSF business models

4 DISRUPTOR DISRUPTION

5 More information about SMSFs than ever before

6 How automation and integration through cloud technology is changing SMSFs forever!

7 Use of cloud technology with SMSF clients To what extent do you use cloud technology with your SMSF clients? Online access for SMSF trustees through delivery of web-based services Use cloud technology in business with SMSF clients

8 TODAY Development Introduction Growth Maturity SMSF sector and the law of diffusion of innovation Renewal (b) Product life cycle Decline (a) Product adoption curve Innovators 13.5% 34% 34% 2.5% 16% Early Adopters Early Majority Late Majority Laggards

9 How to better understand the demographics and psychographics of your existing and future SMSF clients

10 GA WHAT SERVICES DO YOU PROVIDE AND WHAT ARE THEY PROVIDING? P

11 Look deeper than just the surface of your SMSF business

12 Disclaimer Aaron Dunn, The SMSF Academy 2015 This presentation is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The presentation has been prepared without taking into account any personal objectives, financial situation or needs. It does not contain and is not to be taken as containing any securities advice or securities recommendation. Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional tax advice. This presentation was accompanied by an oral presentation, and is not a complete record of the discussion held. No part of this presentation should be used elsewhere without prior consent from the author.

13 SMSF legislative shocks to prepare for now! Bryce Figot, Director DBA Lawyers

14 Introduction In 2015 prepare for three big legislative shocks LRBAs Penalties Victorian property stamp duty! Each is a disruptor However, advisers can take certain steps to mitigate

15 Disruptor #1 LRBAs

16 LRBAs Q: What is the difference between: Magic dragons and LRBAs? A: Dragons live forever but not so little boys LRBAs What does the future hold for LRBAs?

17 LRBAs The Financial Systems Inquiry recommended: Remove the exception to the general prohibition on direct borrowing for limited recourse borrowing arrangements by superannuation funds. LRBAs might not live forever! The Financial Systems Inquiry also recommended grandfathering: funds with existing borrowings should be permitted to maintain those borrowings. When might this pose a big problem?

18 Settlement LRBAs (case study) In September 2014: Purchase contract signed by SMSF to buy off-the-plan Pays 10% deposit Intends to settle using an LRBA In February 2015, bare trust deed executed When will bank sign loan contract with SMSF? In January 2016 apartments built What if DOES SMSF QUALIFY FOR GRANDFATHERING? Deed Sep 14 Feb 15 Jan 16 Feb 16

19 Settlement LRBAs (case study) What was the line in the sand for grandfathering for 2010 IW/LRBA changes? When the arrangement was entered into (Superannuation Industry (Supervision) Amendment Act 2010 (Cth) item 14) According to ATO, when is arrangement entered into? Item 6.4 of the July 2010 Superannuation NTLG minutes: the arrangement has been 'entered into' at a particular time if valuable property (such as a contractual right) has come into existence in respect of the arrangement. This may occur at a time before there has been any transfer of money. Deed

20 Settlement LRBAs (case study) Practical action to protect from legislative disruptor? Implement or at least advise clients to consider a related party loan ASAP If LRBAs not banned, could just borrow from bank and agree to void related party loan ab initio If LRBAs banned, related party borrows from bank using non-smsf security and on-lends to SMSF (Above of course involves conjecture) RELATED PARTY Deed Sep 14 Feb 15 Jan 16 Feb 16

21 Disruptor # 2 Penalties

22 Penalties New legislation means ATO can now unilaterally imposes penalties More important than ever to comply What if something is a bit line ball? Line ball examples: a reg 13.22C unit trust engages in real estate development: is this a business (inhouse asset rules)? a pre-99 unit trust now lends to a member: provision of financial assistance from SMSF to member? did trustee exercise an independent mind when agreeing to terms (ie, is it arm s length)? But advisers have a secret weapon What can adviser do to legally PROVE (at first instance) something?

23 Penalties Make proper resolutions! Section 251A(6) of the Corporations Act 2001 (Cth): A minute that is [properly] recorded and signed is evidence of the proceeding, resolution or declaration to which it relates, unless the contrary is proved. Must have company as trustee for this to work (Yet another reason why corporate trustees are superior) In order to properly record and sign minutes, two key questions: How long after a meeting must you make an entry in the minute book (Corps Act s 251A(1))? Who signs the minutes (Corps Act s 251A(3))? (Different rules apply for resolutions without meetings)

24 Disruptor #3 stamp duty

25 Penalties Does the following give rise to stamp duty in Victoria? No, s 41A exempts the transfer SMSF lump sum (nil consideration) member

26 Penalties What about the following? Does, s 41A exempts the transfer? Must be able to say the beneficiary was a beneficiary when the property first became part of the fund Is an estate of member who hasn t died yet a beneficiary? SMSF There are two possible ways to try to address: Before SMSF acquires real estate, make BDBN in favour of estate Have deed that expressly says estate of member who hasn t died yet is nevertheless a beneficiary member s estate

27 Conclusion

28 Conclusion Disruptors are coming But forewarned is forearmed Advisers can take steps to protect and add value to clients

29 Disclaimer Bryce Figot, DBA Lawyers Pty Ltd 2015 This presentation is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The presentation has been prepared without taking into account any personal objectives, financial situation or needs. It does not contain and is not to be taken as containing any securities advice or securities recommendation. Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional tax advice. This presentation was accompanied by an oral presentation, and is not a complete record of the discussion held. No part of this presentation should be used elsewhere without prior consent from the author.

30 SMSF Regulatory Disruption Peter Burgess, Head of Policy & Technical AMP SMSF

31 #1 White Paper

32 Share of total superannuation tax concessions by income decile Source: Treasury, based on an analysis of ATO data

33 Henry Review

34 True cost of the super tax concessions In 2013/14 was it: (A) $33b (B) $25b (C) $11b (D) None of the above?

35 #2 Accountants exemption

36 #3 Financial advice reforms