A SMSF reserve is simply an amount of money or assets inside your SMSF that is not part of any member’s account. That is, no one has any entitlement to it yet. Reserves do not make up part of any member’s account balance until they are actually credited or allocated to the member.
The main reason for maintaining a reserve in a SMSF is because it can provide better benefits to members and their dependants. However, before considering using this strategic tool, SMSF Trustees must review the SMSF’s governing rules to ensure that they don’t prohibit maintaining reserves.
The following article gives a clear insight into the issues to be considered and a case study which further clarifies how this strategic tool can be used and its’ effects.
July 14, 2017
June 21, 2017
February 2, 2017
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The information provided on this website, including the material and contents provided in the website publications, are informative in nature only and you should not act specifically on the basis of this information alone. It should not be used as a substitute for legal, business, accounting, tax, financial planning or other professional advice. If expert assistance is required, professional advice should be obtained.
Paul Baggetta is the Founder & Principal of Baggetta & Co. Paul Baggetta has been a Taxation Accountant since 1981, a Financial Planner since 1998, and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading) and operated his own Real Estate business for property investment clients for over 5 years as a second business.
Financial planning services are provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135.
Taxation & Accounting services are provided by Paul Baggetta as a Registered Tax Agent (No.61487008) and is a Member of SMSF Association, FIPA & NTAA.