In March 2015 the Assistant Tax Commissioner for SMSFs, Matthew Bambrick, addressed the Tax Institute. One of the most important parts of his speech related to claiming Exempt Pension Income, and in particular when an actuarial certificate is required by a Self Managed Super Fund.
He explained 2 common misconceptions.
Firstly, he made it clear that SMSFs can't be segregated for part of a year. In order to be exempt from requiring an actuarial certificate, the fund must be segregated for the entire year. He expressed concern that this requirement is not being followed adequately.
Secondly, he stated that an actuarial certificate is not optional. For example, if a fund only has a small amount of income for the year then it is still required to obtain an actuarial certificate, even if the cost of the certificate is greater than the value of the tax exemption. Of course this issue rarely arises for Lime Actuarial's clients - it is far more common for other actuaries who charge more for their certificates. Nonetheless it is something to be aware of.
In both cases we should expect greater scrutiny from the ATO. If ever you aren't sure if you need an actuarial certificate then please feel free to call us on 1300 546 300.
Greg Einfeld has over 20 years’ experience in the Australian Superannuation and Financial Services industry. He has MEc and MBA degrees, is a licensed financial adviser, a qualified actuary, and specialises in Self Managed Super Funds (SMSF’s). He regularly presents on a variety of SMSF topics including investment, tax, estate planning, pensions, administration and strategies.