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Travels with my SMSF

Travelling overseas for an extended period of time is an exciting adventure and a chance to have a break. However, SMSFs do not take a break when you do, which is why it is important to ensure everything remains in line while you are away. SMSFs that breach the residency rules are taxed at the marginal rate of 49% rather than the concessionary rate of 15%. Before travelling, trustees must consider the implications to their SMSF.

Fund recognised as an Australian fund:
The SMSF will be recognised as an Australian super fund provided that the setup of and initial contributions have been made and accepted by the trustees in Australia, however, the trust deed does not have to be signed and executed in Australia. An SMSF that has been established outside Australia will also satisfy the test if at least one of the fund’s assets are located in Australia.

Management and control of the fund carried out in Australia:
The central management and control of the fund must usually be in Australia. This means the SMSF’s strategic decisions are regularly made, and high-level duties and activities are performed in Australia, such as formulating the investment strategy, reviewing the performance of the fund’s investments and determining how assets are to be used for member benefits. Generally, funds will meet this condition even if its central management and control is temporarily outside Australia for up to two years.

Active member test:
An “active member” is a contributor to the fund or contributions to the fund have been made on their behalf. To satisfy this test, the fund will need to have active members who are Australian residents and hold at least 50% of the total market value of the fund’s assets attributable super interests, or the sum of the amounts that would be payable to active members if they decided to leave the fund.

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Using your tax return wisely

Posted on July 8, 2019 by admin

Getting your tax refund back is exciting, but as tempting as it is to splurge, consider other ways you can put that money to good use. It is easy to get caught treating your return as extra money when you shouldn’t see it any differently than your regular paycheck. Give the money a purpose by thinking about your personal financial situation and determining your needs.

Emergency fund:
An emergency fund can make all the difference if a difficult financial situation comes up, acting as a backup in the case of an emergency such as losing your job or medical costs. Building an emergency fund with enough money to cover at least three months worth of expenses is a good starting point. Make sure the money is added to a high-interest savings account to utilise compound interest. If you are contributing regularly to this fund, adding money from your tax return can boost it above schedule.

Make debt repayments:
With a bit more money at your disposal, now is the time to make repayments on debts you may have. Start with the higher interest debts and work down, your interest repayments will drop when you lower your outstanding balance. These debts can be things like credit cards, personal loans, outstanding bills or mortgage repayments.

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