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Master Member
Group: Forum Members
Last Login: 2 days ago @ 3:01:55 AM
Posts: 111,
Visits: 2,010
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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
Neil H.
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MySF Administrator
Group: Administrators
Last Login: 4/11/2010 3:24:01 PM
Posts: 464,
Visits: 633
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Hi,
Correspondence with other members (including the discussion in this thread) 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
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Master Member
Group: Forum Members
Last Login: 2 days ago @ 3:01:55 AM
Posts: 111,
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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".
Neil H.
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Junior Member
Group: Forum Members
Last Login: 18/09/2010 1:59:31 AM
Posts: 1,
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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
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Junior Member
Group: Forum Members
Last Login: 2 days ago @ 6:48:36 PM
Posts: 4,
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| 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?
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