MySF Forums / MySF - The Application / General Discussion Area / SMSF Establishment Costs - who pays & are they deductible / Latest Posts

RE: SMSF Establishment Costs - who pays & are they deductible

Sunray — Fri, 24 Jun 2011 16:04:53 GMT

Question re the purchase of the MySF software subscription pack. Did members expense the software purchase of $324 ($360-10%) in the year of purchase or are you deprecating it?

RE: SMSF Establishment Costs - who pays & are they deductible

Rocinante — Fri, 17 Sep 2010 23:55:07 GMT

I had the same question.

Answer: no, set up fees are not deductable as they are of a capital nature. Good reference for super funds and deductable expenditure is ATO - Tax Ruling 93/17.

ATO reference:
http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR9317/NAT/ATO/00001&PiT=19970702000001

Also found a good site with many useful articles for SMSFs at the following site:

http://www.atcbiz.com.au/self_managed_super_fund_smsf_articles.php

Regards

RE: SMSF Establishment Costs - who pays & are they deductible

PP Super — Tue, 04 Mar 2008 22:04:38 GMT

Just for anyone who is interested:

My auditor, Stan Neild, advised me that the depreciation of set-up costs was only deductible for a business and that the ATO has deemed that a SMSF is not "in business".

RE: SMSF Establishment Costs - who pays & are they deductible

MySF2 — Thu, 07 Feb 2008 15:47:29 GMT

Hi,

Correspondence with other members (including the discussion in [url=http://www.mysf.com.au/members/Topic3675-24-1.aspx]this thread[/url]) indicates to us that establishment costs for an SMS should be amortised (depreciated) over a period of 5 years, which means a rate of 20% per year assuming straight line depreciation. This effectively means that in each year you would claim 20% of the initial cost as depreciation expense, which is a tax deduction.

In MySF Manager this is normally done by creating a physical asset class called 'Establishment Costs' or similar and then adding in these costs as a physical asset with a depreciation schedule specifying a useful life of 5 years. It may seem strange that the cost is added as a physical asset, but this allows for simple automation of depreciation calculations.

Before acting on this information please check it with your accountant, auditor and/or the ATO.

Regards,

MySF

SMSF Establishment Costs - who pays & are they deductible

PP Super — Wed, 06 Feb 2008 03:50:59 GMT

Hi,

I've recently setup my SMSF and was wondering:

Although I had to pay the costs of SMSF trust deed etc before the trust actually was created, am I right in thinking the SMSF establishment costs are actually a cost of the Fund - ie the SMSF should re-imburse me for these costs.

Also are these costs claimable against tax.

My understanding (I'm not sure where from!) was that the Establishment Costs were a Capital Cost and could be amortised over 5 years with a deduction of 20%/year.

However, I also seem to remember reading that this was only deductible for a business and that a SMSF was not "in business"

What have others done - and was the auditor happy!

Regards

Neil