This article will help to ease some fears about market volatility and outline a behavioural approach to address emotional decision-making. Hopefully, this information will assuage fears that many investors have experienced over the past several months.
The investment technique known as ethical investing prioritises the investor’s moral, religious and social ideals over financial gain. This is because a growing number of investors have begun to demand social responsibility from the companies they invest in, primarily because of the rise in dubious and unlawful investment arrangements.
In today’s society, the notion of wealth extends beyond financial resources. As individuals seek a more balanced and fulfilling life, the concept of wealth has evolved to encompass various factors such as education, healthcare, job satisfaction, and social connections. This article explores the changing perception of wealth in contemporary Australia and highlights the importance of holistic well-being in defining prosperity.
If you have an SMSF, it’s essential to get your fund is in good shape and ready for June 30 and the annual audit.
It’s particularly important this year, because the ATO is focussed on fixing a number of issues when it comes to SMSFs. These include high rates of non-lodgment and problematic related party loans by SMSF members operating small businesses.
Review all the administrative responsibilities of your SMSF to identify any incomplete ones. These include updating the fund’s minutes to record all decisions and actions taken during the year, lodging any required Transfer Balance Account Reports (TBARs), and documenting decisions about benefit payments and withdrawals.
Although it’s easy to forget, SMSFs are required to keep all contact details, banking details and electronic service address up-to-date with the ATO.
If you want a super contribution counted in the 2022–23 financial year, ensure the fund’s bank account receives payment by 30 June.
Minimum pension payments to members also need to be made by 30 June to meet the annual payment rules and ensure the income stream doesn’t cease for income tax purposes.
If your SMSF receives tax-effective super contributions for salary sacrifice arrangements, ensure the fund has all the necessary paperwork before the arrangements commences.
Check you have appropriate evidence (and trust deed authority) to verify any downsizer contributions. From 1 January 2023, SMSF members aged 55 and over are eligible to make a downsizer contribution of up to $300,000 ($600,000 for a couple).
Lodge your annual return on time
Non-lodgment of the annual return is a major red flag for the ATO, particularly for new SMSFs.
Ensure your annual return is prepared and lodged on time to avoid coming under the tax man’s microscope for potential illegal early access or non-compliance.
The planned new tax on member balances over $3 million could create significant issues for some SMSF members, so trustees should review the potential implications ahead of EOFY.
Funds with large, lumpy assets such as business real property should consider the implications and liquidity issues of members implementing strategies designed to limit the impact of the new tax.
SMSF rules require all fund assets to be valued at market value at year-end, including investments in unlisted companies or trusts, cryptocurrency, and collectible assets. The ATO is monitoring this area, so trustees should organise appropriate valuations as soon as possible.
Ensure valuations can be substantiated if there are audit queries and the process is undertaken in line with valuation guidelines.
Review the fund’s investment strategy to ensure it covers all relevant areas, including whether investment asset ranges remain relevant to your investment objectives. Deviations from strategic asset ranges must be documented, together with intended actions to address them.
Non-arm’s length expenses (NALE) and income are key interest areas for the ATO, so check the fund complies with the rules.
Pay particular attention to all SMSF transactions involving related parties and ensure their arm’s length nature can be fully substantiated.
Trustees are required to appoint their auditor at least 45 days before lodgment due date, so ensure you have this organised.
From 1 July 2023, SMSFs will be required to report TBARs more frequently. All TBAR events will need to be submitted 28 days after the quarter in which the event occurred, so ensure you have systems in place to meet the new requirement.
All TBAR events occurring in 2022-23 will need to be reported by 28 October 2023.
SMSF with a corporate structure must ensure all trustees have a director ID number. Although this was a requirement from 1 November 2022, many SMSF trustees are yet to apply.
Holding a director ID is an essential part of the SMSF registration process and directors must apply via the Australian Business Registry Services website.
If you would like to discuss EOFY tasks for your SMSF or your personal super contributions, reach out to the Sherlock Wealth team here.
Andrew Sherlock is the Owner & Head of Advice at Sherlock Wealth.
A Sydney-based financial planning firm, Sherlock Wealth has been helping successful families, business owners and individuals with their wealth creation and wealth protection needs for more than two generations.
A Chartered Accountant with a background in funds management, Andrew’s career spans more than 30 years. Andrew was one of the first people in Australia to obtain the Self-Managed Superannuation Specialist accreditation and is one of only a few advisers in Australia to be a Certified Investment Management Analyst. He is a lifetime member of the international MDRT Top of the Table and holds a BA Economics degree from Macquarie University with majors in accounting and finance.
Helping clients achieve their lifestyle goals through smart investing and asset management, wealth structures, and strategic planning are the cornerstones of what Andrew and the team at Sherlock Wealth provide.
Andrew can also be contacted at ask@sherlockwealth.com.
While a holiday home can become your own piece of paradise and create many happy memories, organising how to finance it takes preparation.
Volatility is part and parcel of investing so it’s important to put it into perspective and look at the full picture when thinking about your wealth, rather than focus on day-to-day market swings.
If you’re close to retirement, chances are you’ve already spent time thinking about how to tap into your superannuation when you retire.
Rising inflation brings about concern for many, but a long-term focus—can help any investor navigate choppy waters.
Given the inherent volatility of security prices in capital markets, it is useful to remind ourselves of strategies that investors can utilise to meet their investment goals.
Knowing how your mind works can help you avoid the more obvious traps many investors fall into.
