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Splitting assets when couples part

There are both legal and tax implications to be considered when former partners in a SMSF decide to split after the breakdown of the relationship.

It is possible to transfer assets, such as property, from one super fund into another; however, there are four things individuals need to consider:

1. Separating couples need to work out how they will go about splitting their superannuation fund.  They can choose to enter into a formal written agreement, seek consent orders, or if the separating couple cannot reach an agreement, they can seek a court order.

2.  It is important to have the necessary documentation as they are essential in the event of an ATO audit. Due to there being beneficial tax consequences in splitting a superannuation fund, it is essential that the documentation, such as the notice for splitting the super, show a genuine separation.

3. If the super fund has property as the major form of investment there is the potential that it may create a liquidity problem; however, this can be addressed with future contributions.  Individuals will also need to aware of the market valuation rules for real estate in DIY funds.

4. If the new fund is to be a single member fund it is advisable to incorporate a special purpose company to be the trustee. This avoids having a second person as a trustee.

Posted on 13 February '14 by , under Super.

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Amnesty means that 24,000 businesses own up to underpaying Aussies superannuation

An amnesty scheme which ended earlier this month has caused around 24,000 businesses to admit to underpayment of their worker's super. A total of 588 million dollars will be distributed to almost 400,00 individuals.

The scheme, which covered payments from the introduction of super in 1992, gave employers the opportunity to come clean without any consequences as long as they paid the unpaid super as well as 10% interest for every year the money was overdue.

The ATO will be directing its attention at any businesses that did not admit fault and these businesses will face severe penalties.

Many individuals are looking to access their superannuation early in order to have support during these times. Although there is criticism of early access to super, this facility has been helpful to many families to keep afloat.

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