Let’s delve into a crucial topic for every diligent self-managed superannuation fund (SMSF) trustee: ensuring your SMSF is complaint and you have optimised its tax position.

At Munro’s, we understand the intricacies involved in managing a SMSF. That’s why we’re dedicated to guiding you through every step of the way.

Firstly, we take the responsibility of preparing your SMSF tax return off your shoulders. We gather all necessary source information, meticulously prepare your annual financial statements, and ensure all requisite documentation and the tax return are completed accurately.

It’s essential to recognise that every SMSF must undergo an annual audit. Our approach simplifies this process for you. We manage the audit on your behalf, ensuring it’s both thorough and seamless, sparing you from unnecessary complexity.

Once everything is finalised and all documentation is signed off, we proceed to lodge your annual tax return.

If you’ve fallen behind on previous year tax lodgements, we’re also here to assist – helping you get back on track.

Our primary goal is to work closely with you to ensure that you’re paying the minimal amount of tax legally possible.

If you’re in need of assistance with your SMSF tax return and you’re looking for a professional advisor to help navigate the complexities of SMSF management, we’re here to help

If you find yourself in a tax dispute, you’re going to want have an experienced winner by your side.

Munro’s have those wins.

Whilst we’re always doing our best to prevent a tax dispute in the first place, sometimes you might find yourself defending in an audit, objection or tribunal situation.

In our experience, very few of our clients are audited. We’re confident this is because we have a solid reputation for doing things the legal way.

Since audits are few and very far between, our clients immediately have peace of mind. They get on with taking care of their business, rather than worry about a potential audit.

When we do see an audit, it’s usually a high wealth review. Once your business and/or wealth is around $50 million plus, you’re likely to be pulled into the regular high wealth review program.

Our role in the process is to sit between you and the ATO, finding out what the ATO wants and helping you put the replies together to get them off your back as soon and as painlessly as possible. It’s a strategy we excel at.

There comes other times when you might need to object to a tax assessment or decision. In these instances, we use our experience and research techniques to consider the avenues to success, and where we determine a successful outcome is realistic, we help you throughout the objection process.

Over the years, our clients have saved thousands upon thousands of dollars due to successful objections.

In the extremely rare instances that an objection is not successful, but we feel confident you have been wronged by the outcome, we have the option to go to the Tribunal.

We’re limited by what we can say here, due to confidential settlements. What we can say, is that if you want to have an experienced winner by your side, then you’ll have that with us.

So, what’s it like being a client of Munro’s? You ordinarily don’t have to worry about tax disputes because we legally minimise your taxes and seldom experience ATO audits. In the cases where an audit, objection or Tribunal situation arises, you have the winning experience by your side.

On Superannuation.

(And) So, when we’re talking about Self-Managed Super Funds (SMSF), as you see there towards the bottom of that side, there’s tax free super earnings in retirement phase.

So, what I mean here is that when in super you are earning income, profits, gains and that superannuation is paying out a retirement stream to you.

So you’ve (you’ve) got to your older age and you’re starting to draw down super, that super, the earnings on that can be tax free.

They won’t necessarily have to pay any tax. You might have to pay 10 or 15 percent tax, but it could be tax free. Depends on, obviously, the super laws at that time when you’re taking them out.

But in this current climate, if you’ve got less than $1.6 million, and that’s been put into support that retirement stream, you’re basically looking at whatever earnings are in there, completely tax free.

That means, you might be lucky enough, you might own some crypto in there and it might go from $100,000, it might go to $10 million, that growth, in the right conditions, completely tax free.

So incredibly great environment to have.

So the big downside of superannuation, structuring it that way, would be your access to super monies. If you’re not anywhere near retirement age, you can’t touch the, can’t touch and use those profits for your personal use until we get to retirement.

So that’s a disincentive to put the money in there, if you wanted to use the gains for something else before you hit retirement.

But if you’re looking to invest in cryptocurrency and you think they’re gonna help part of your longer term retirement planning, superannuation can be very attractive because of those lower tax rates.

I know we’re also talking about super. We’re also talking about contributions and their ability to reduce our personal taxable income, and therefore some tax rate.

So what you can do is you can contribute monies to superannuation to get a tax deduction for it.
Why would you do that? Because that can reduce your overall tax rate.

So contributing to super, a contribution that goes into super that is deductible to you, would be ordinarily taxed at 15% in the super.

If you’re a high income earner, say, earning over $200,000, I think the limit is at $250,000 I can’t quite recall at this time, somewhere within $200,000 or $250,000. If you’re earning over that amount that contribution actually might be effectively taxed at 30%, but still there is benefit.

The benefit would be that the amount that you contribute there, that’s within certain thresholds. So, there’s certain thresholds that you can do. So, you can’t just contribute as much as you want into super. So, you’d be (have to be) very mindful of the contribution caps. But the amount you contribute goes as a tax deduction, in your tax return. So if you’re going to pay 39 cents for each dollar profit, 49 cents in each dollar profit. Now each dollar that you put into super is saving you the difference between your tax rate and the super tax rate.

So if your tax rate was 47 cents on the dollar and going into super you only paying 15 cents, you’re basically saving 32 cents on the dollar each (each) dollar contributed to super.

If your tax rate was 30 percent going into super, you’d save 17 cents.

If your tax rate was 39 cents on the dollar and whatever reason your super was, contribution was being taxed at 30%, you’re still saving 9 cents on the dollar.

So you are saving, making those contributions.

But it’s really important, there are contribution caps going in, into super, and that some of those caps might have already been soaked up.

Used up by say employer, your employer make contributions on your behalf. So you might only have a small amount available.

But this, at this time, we now have availability of catch up contributions.

If in previous tax years, you didn’t fully utilise your cap, those unused amounts can flow over. I believe the rule is up to five years, starting about three years ago (2019FY). They can add on top and then all of a sudden, instead of that year’s cap you might have had $10,000 available, if you had $10,000 available that you didn’t use up for the last three years, the actual total cap you can use is now $40,000. So, you can make a slightly larger contribution.

You might want to, you might want to consider using that to get that tax savings.

There is also another strategy to give a little bump up, to that you can contribute as well. It’s called a “Reserving Strategy”.

It’s very unique, a very complex one, you want to get (definitely get) advice and assistance with this. But essentially it allows you to use next year’s contribution. That amount you’re not going to use next year to bring it into this year.

You would need a Self-Managed Super Fund (SMSF) to do this and you’ve got to be very careful around how much you’re going to use in this reserving strategy, because if you’re making a contribution now and then next year you made more than you otherwise were planning to, and you might breach the cap next year, which could have some serious implications.

So, when it comes to all this, wrapping it all up, and we’re talking about Self-Managed Super Funds (SMSF).

Look, highly regulated. A lot of onus is on you to abide by the super laws and tax laws, there.

These funds are audited. So essentially your accounting costs go up quite substantially. You’ve got audit costs involved.

So ordinarily, the rule of thumb is, or at the very least $200,000 in super to make them cost effective. This day and age, you even hear of A.S.I.C. talking about higher amount.

Yes, you can set them up if you have a lower (lower) amount in super. But, you’ve got to look at that cost and benefit analysis.

And, I really do suggest that you seek out professional help with setting these up, or at least considering setting these up, and if you’d like to explore that Munro’s can consistent with that process.