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Distribution of earnings & tax to members in SMSF (both pension & accum)

Discussion in 'Superannuation, SMSF & Personal Insurance' started by SueJ, 30th Oct, 2019.

  1. SueJ

    SueJ New Member

    30th Oct, 2019
    Hi there, can anyone please clarify for me ..... as I feel like I am second guessing my new accountant (each accountant seems to do things differently), very confusing......

    Our SMSF has 4 members, two members with both a pension and accumulation account and two members with just accumulation accounts

    We use an actuary to calc % of income that is tax exempt etc.

    On my tax return/financials it seems that the before tax income (less Franking credits) is distributed on the actuary % basis to all members accounts (pension and accum), and then likewise the tax refund (fr cr less tax owed) is distributed on the actuary % basis.

    I would have thought that the BEFORE tax income (incl franking credits) is distributed to all members accounts (pension and accum) using actuary %, and then separately the tax liability is then distributed across members accounts in accumulation ONLY (using prorata basis of members actuary % as a % of all accumulation account %’s)

    I cannot fathom why the distributions to the pension accounts are using the actuary % on earnings net of tax when they are tax exempt.....

    twisted strategies likes this.
  2. twisted strategies

    twisted strategies Well-Known Member

    3rd Nov, 2013
    welcome to InvestChat , Sue ,

    this is way outside my range of skills , so i will only ask extra questions so a skilled member can assit you better

    from what you are saying , i get the feeling that the assets are in joint names ( aka 'the trust ' )
    where proceeds and assets are shared equally but NOT the tax implications )

    if that is the case my uneducated opinion would be similar to yours

    if not, are there 6 accounts spread among 4 individuals , that might mean each account is assessed individually ( to satisfy the tax implications )

    good luck