Issue: 384
Sent: 30-03-2010 10:52:15
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Changing Resource Sector MoodsA How To Book Of Self Managed Super FundsBrain Rules 6The Easiest way to do a Client NewsletterKids and Money: Be True to YourselfWhy Warren Buffett won't buy a NewspaperATO Taxpayer Alert on Excess ContributionsEmail Marketing Business Opportunity - Helen Bairstow
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ATO Taxpayer Alert on Excess Contributions

Click here to buy - A How To Book of SMSF's by Tony Negline
Tony Negline

Yesterday the ATO released a Taxpayer Alert about excess super contributions and using the provisions of the super fund trust deed to avoid the payment of excess contributions tax.

The terms of the super fund's trust deed are amended to force any excess contributions into a separate trust and then repays those contributions.

There are many questions about this particular scam. But for my purposes these issues are not my major point that I wish to make here. In truth the ATO do a good job in detailing most of the major issues in its Taxpayer Alert.

Overall it's good that the ATO are moving against this sort of nonsense.

What interests me the most about this issue is that it once again shows the importance of a super fund's trust deed.

The wording of the trust deed is one of the most critical document any trust can have. There is a growing level of interest in how far the general compliance clause (ie the "we won't do anything which stops our fund getting tax concessions" clause) and the catch all clause (ie, the "we can do whatever the super laws allow us to do" clause).

Some have argued that the general compliance clause and the catch all clause are all that you need for fairly irregular trust deed updates.

Others argue that a trustee must have specifically defined powers otherwise their terms of trust provide no definite power.

This is a complex area and the lawyers will argue their points of view for many years.

So what is a SMSF trustee meant to do? Given the level of tax concessions that attach to superannuation, and for most people the significant amount of money involved, it seems to me that the best course of action is a reasonably conservative approach.

But what is a conservative approach? Most of the recent court cases involving super funds have spent considerable amounts of time dealing with the actual wording of the trust deed to determine what powers or responsibilities a trustee might have had or might not have had.

What does this tell you about a conservative approach?

Finally please consider purchasing a copy of my book. You can look at the contents page at the following link:

Two options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link:

You can read the ATO's taxpayer alert at:

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This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.

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