How will downsizer contributions work for SMSFs?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Nodrog, 13th Jan, 2018.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Nodrog

    Nodrog Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    11,376
    Location:
    Buderim
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    Hence the importance of deeming clauses in any quality SMSF deed. Deeming clauses will deem that clauses not specifically in the deed are taken to be incorporated where they are missing to the extent the deed and "law" is inconsistent.

    The very nature of super is tricky in that most penalties for incorrect super actions are subject to punitive tax outcomes. So not "prohibited" as much as they have a penalty imposed.

    Key message for anyone contemplating downsizer contributions is they may/will need to seek legal, financial and tax advice to avoid serious errors. One of the key issues is that when the contribution is made a member may seek to commence a new pension and address if a single pension is to occur.

    I see the downsizer contribution of VERY limited use. In many instances such instances already occur and it is already not financially viable to add the savings from equity release to super. Instead the high tax free thresholds available to individuals can permit a substantial amount to be held and invested personally. The other obstacle is that of age - More often sale of the family home occurs in conjunction with downsizing and move to aged care.