Does ATO need to know how I spend my pension?

I spoke to a financial planner who advised me that the ATO requires self-managed super funds (SMSFs) to report to the ATO the members’ pension payments on a quarterly basis. My accountant says he has no knowledge of this requirement. After submitting my data for my accountant to prepare the FY 2023 financial statements for our SMSF and the SMSF’s tax return, he required me to provide details of how we had spent our pension payments. I complied but felt it was intrusive and unnecessary. My wife and I are both 69 and have been drawing a pension for five years. Using your calculators, there are sufficient funds for us to draw down at our current rate for another 30 years. How difficult is it to transfer from a SMSF to a retail fund like Vanguard?

Super whiz Meg Heffron tells me that APRA-regulated super funds have to report members’ pension payments on a quarterly basis, but not SMSFs.

APRA-regulated funds have to report members pension payments on a quarterly basis but not SMSFs.Credit: Getty

The adviser may be getting confused between the need to report pension payments (not required) with the commencement of new pensions (which is required quarterly). There is certainly no need to report what the pension payments were used for.

It’s possible to transfer your SMSF to a fund such as Vanguard, but it requires care and there are rules to follow. A smooth transition would also depend on the experience of your accountant at winding up SMSFs.

I am 35 earning $150,000 a year, married with three kids and have a mortgage. When is a good time to salary sacrifice to super? With our current cost of living it might be hard to do more than $25 a week.

In view your age, and the mortgage, and possible future expenses with your children, I think you’re better off to focus on getting the mortgage under control. Your employer should be putting in $17, 250 a year into superannuation, which will provide a good retirement base for you.

You can always make extra contributions when you are older and the mortgage is paid off, and the children are more independent.

We are Australian residents living in London. I believe there is a lower asset test cut-off point for a pensioner couple like us who living overseas. Can you please let us know the latest amount for the assets test?

The scales are slightly different because non-residents don’t get supplements. For example, the assets cut-off point for a couple living in Australia is $470,000 of assets but, for non-residents, it’s $451,500. The difference is minimal.

I’ve been a non-resident of Australia for many years. About 19 years ago, our mother died and left my sibling and myself a house in Brisbane. He has the right of occupation as long as he wishes. He will live in there for the rest of his life. I have no intention of returning to Australia. I wonder what my capital gains tax position is regarding any future sale of the property because I’m a non-resident.

Tax specialist Julia Hartman says that assuming the Brisbane house was your mother’s main residence at her date of death, the short answer is you are only exposed to CGT for the days between your brother’s death and the sale of the property. You will be taxed at non-resident tax rates. This is not a bad outcome, given your brother had a right to occupy under the will.

When your brother dies, the CGT calculation will start with the market value at date of your mother’s death. You add to that all the holding costs and improvements to the property since then, as well as the selling costs. The difference between this total and the sale proceeds is the capital gain on the entire house.

It will need to be halved for your share. Count the number of days from your brother’s death to the settlement date. Then divide this by the number of days from your mother’s death to the settlement date. This is the percentage of your half of the capital gain that is taxable to you. The references are ITAA 1997 sections 118-195 and 118-200(2)(b).

Noel Whittaker is the author of Wills, Death & Taxes Made Simple and numerous other books on personal finance. Email: [e-mail]

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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