What is the SIS Act 1993?
The Superannuation Industry Supervision Act 1993 (SIS ACT) sets out a guide for all superannuation funds. The aim of the act is to provide a framework for the management of superannuation funds. For the purposes of this article, the focus will be on self-managed superannuation funds (SMSFs).
What does SIS act stand for?
Superannuation Industry (Supervision) Act
As a type of superannuation fund, SMSFs’ overriding legislation is the Superannuation Industry (Supervision) Act 1993 – also known as the SIS Act.
What is the superannuation sole purpose test?
What is the sole purpose test? The sole purpose test sets the primary and ancillary purposes for which a superannuation fund must be operated, namely to provide benefits to, or in relation to, members after their retirement, on reaching retirement age, or on their death.
What is limited recourse borrowing arrangement?
A limited recourse borrowing arrangement (LRBA) involves a self-managed super fund (SMSF) trustee taking out a loan from a third party lender. The trustee then uses those funds to purchase a single asset (or collection of identical assets that have the same market value) to be held in a separate trust.
Who is a SIS Dependant?
SIS Dependancy dependant, in relation to a person, includes the spouse of the person, any child of the person and any person with whom the person has an interdependency relationship. So a SIS dependant is a spouse, child and interdepency relationship.
What is a Part 8 associate?
A Part 8 associate of an individual (whether or not the individual is in the capacity of trustee) includes, but is not limited to: a relative of the individual. a company that is sufficiently influenced by, or in which a majority voting interest is held by, an individual and/or their Part 8 associates.
What happens if you breach the sole purpose test?
Failing the sole purpose test can lead to: An SMSF losing its concessional tax treatment (meaning the fund may need to pay additional tax on its superannuation contributions and investment earnings)
What is sole purpose?
COLLOCATIONS – Meaning 1: the sole person, thing etc is the only onenounssomebody’s sole purpose/aimTheir sole purpose was to kill. the sole reasonHis sole reason for calling was to shower abuse upon me.
Which banks lend to SMSF?
Which banks have loans for SMSF trusts?
- Liberty Financial.
- Mortgage House.
- Reduce Home Loans.
- La Trobe Financial.
- Switzer Home Loans.
Can super fund borrow from members?
The SMSF can either borrow from a financial institution e.g. a bank, a credit union or from the Members. Lending is done with non-recourse borrowing arrangements. This means the lender does not have a recourse or right on other assets in the SMSF. For this reason, the lender (bank) will ask the Members for a guarantee.
Is an ex spouse a SIS Dependant?
A former spouse is not your SIS dependant – assuming they are not financially dependant on you and don’t live with you. But the tax law specifically lists a former spouse as a tax dependant. As a result, your former spouse can only receive your super through your estate, not directly from your fund.
What is interdependency relationship?
What is an interdependency relationship? Generally, two people have an interdependency relationship if: they have a close personal relationship, and. they live together, and. one or each of them provides the other with financial support, and.