CHOICE guide to DIY super

We give you the facts without the advertising hype and expose the dangers.
 
Learn more
 
 
 
 
 

05.Contacts and jargon buster

More info

Free information about retirement investments:

  • Centrelink Financial Information Service (FIS), www.centrelink.gov.au, ph 13 23 00.
  • National Information Centre on Retirement Investments (NICRI), www.nicri.org.au, ph 1800 020 110 or 02 6281 5744.

These associations offer education for their members:

Jargon buster

  • Arms-length provision — any investments or leasing arrangements with related parties (see below) must be entered into under normal commercial terms.
  • In-house assets — loans to, investments in and leases with a related party. These are restricted to 5% of the fund’s assets. For example, if the fund owns a holiday home, members can only use it if its value isn’t more than 5% of the total value of the fund’s assets. Business property owned by the fund and leased to a member is exempt from this rule.
  • Related parties — a member of the fund or a person somehow related to a member, including family, friends and business associates. Generally a fund is not allowed to buy assets from related parties. Exceptions are assets such as listed securities (shares, bonds etc) traded at market price, a business property bought at market value or ‘in-house assets’ (see above).
  • Sole purpose test — must be met in order for the fund to receive concessional tax treatment. The fund (and its assets) must be seen to have as its ‘core purpose’ paying benefits when members retire, or after their death. Generally, you can’t receive any other benefit from the assets owned by the fund. For example, if the fund owns shares, you wouldn’t be allowed to receive any shareholder discounts you’d receive if you owned them personally.
 

Sign up to our free
e-Newsletter

Receive FREE email updates of our latest tests, consumer news and CHOICE marketing promotions.

 
Your say - Choice voice

Make a Comment

Members – Sign in on the top right to contribute to comments