(CTH) 13/10/2014

From the ATO website:

Case study: breaching SMSF residency rules - The ATO has released a case study of how voluntarily disclosing to the ATO an SMSF's breach of the super laws could result in the fund retaining its complying status and continuing to receive concessional tax treatment until it wounds up.

Does the temporary budget repair levy apply to SMSFs? - The ATO says the super fund tax rates that match the top marginal tax rate for individuals have been
increased by 2%.

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Pozzebon (Trustee) v Australian Gaming and Entertainment Ltd (in liq)

The Federal Court has held that a SMSF trustee was merely an unsecured creditor in relation a commercial loan to a company after finding that its security interest had not been registered in time on the PPS Register to avoid the interest vesting in the company (in liquidation).

On 24 December 2013, the trustees of the self-managed superannuation fund (the applicants) agreed to lend $250,000 to Australian Gaming and Entertainment Ltd (the company). The terms of the loan included a security agreement under which the company agreed to mortgage personal property in favour of the applicants. On 19 May 2014, the applicants registered on the Personal Property Securities Register (PPSR) their security interest pursuant to the Personal Property Securities Act 2009 (PPSA). The company was placed into voluntary administration on 26 May 2014 with a single asset, being $860,000 in a bank account.

The Court held that the applicants' security interest was not valid and enforceable against the company. It followed that the security interest vested in the company (in liquidation) pursuant to s 588FL of the Corporations Act 2001with the result that the trustees of the SMSF were unsecured creditors in relation to the outstanding $348,713 debt. Because of the time at which the security interest was registered relative to the commencement of the voluntary administration of the company (ie within 6 months), the Court ruled that the security interest would vest in the company pursuant to s 588FL of the Corporations Act, unless the applicants could establish that the security interest was not perfected only by means of registration. However, the Court rejected the applicants' submission that the method of perfection was not by registration alone. As such, the Court ruled that the security interest was not valid and enforceable against the company. (Pozzebon (Trustee) v Australian Gaming and Entertainment Ltd, in the matter of Australian Gaming and Entertainment Ltd (in liq) [2014] FCA 1034, Federal Court, Collier J, 24 September 2014.)