Self Managed Super Fund

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September 17, 2018 at 1:45 am #101755

JulianCohen
Participant

Firstly I realise this question should also be addressed to my accountant, and I will be doing so, but firstly I wanted to ask the guys that actually might be doing this in practice.

Is there a maximum amount of trades that the Tax Dept will deem as allowable in a SMSF?

Nick do you run your Growth Portfolio as a super fund for example?

September 17, 2018 at 2:14 am #109163

GlenPeake
Participant

Hi Julian,

I haven’t seen any permitted MAX trade numbers published with my SMSF… (Trading WTT, so my volumes are low…etc)

I’m not sure what you had in mind in terms of the trade volumes/strategy for your SMSF? If you had MOC/MR in mind for your SMSF you might run into some other limitations around the borrowing rules allowed etc.

https://www.wealthsafe.com.au/services/superannuation-smsf-faq/

But, as you mentioned definitely one for the Accountant to comment on.

Glen

September 17, 2018 at 3:03 am #109166

JulianCohen
Participant

Thanks Glen

I was thinking along the lines of the Growth Portfolio type of trade frequency. Simple and steady

September 17, 2018 at 4:03 am #109167

Anonymous
Inactive

I asked the same question to my acc and got this response.
Q. A question regarding trading frequency within a SMSF. What is the maximum number of trades allowed within the fund before the ATO considers the activity a business and changes the status of the fund?
A. The status of the fund wouldn’t change, it is how any profit or loss on sale of assets is treated.
It not just how many trades happen, it is what is the intention when buying the asset – are you looking to make a quick $ or are you purchasing with the intent to hold, grow, earn an income from the asset.
We also weigh up many factors including the number of trades, frequency, how long they are held for etc.

September 17, 2018 at 4:58 am #109168

Nick Radge
Keymaster

My accountant, who also did the tax for traders such as John ‘Rambo’ Moulton, says my SMSF shouldn’t do much more than 50 trades a year.

If you do get audited by the ATO, and they do determine you’re running a business in the SMSF, then you’re in some serious strife.

September 17, 2018 at 5:39 am #109169

JulianCohen
Participant

So the Growth Portfolio is border line? Actually if you are looking at the amount of trades per year it sells to replace with another then it should be OK as far as 50 per year…What did yours do last year Nick? I have run it from May this year and sold 11 shares so far.

September 17, 2018 at 6:00 am #109174

Nick Radge
Keymaster

I have done 98 trades in three years myself. Frequency changes depending on market conditions.

September 17, 2018 at 6:55 am #109175

JulianCohen
Participant

Nick Radge wrote:

I have done 98 trades in three years myself. Frequency changes depending on market conditions.

OK so it sounds like it is perfectly reasonable to use the Growth Portfolio inside a SMSF.

Glen, do you use Wealthsafe?

September 18, 2018 at 3:49 am #109164

RobGiles
Member

According to my accountant,

” a SMSF must run on Capital account and can not run on Revenue account (which makes sense when I think about it as a super fund is not meant to run a business).

Therefore, it doesn’t matter how many trades are done with this answer.” but of course you should check with your accountant to make sure they agree

September 18, 2018 at 4:05 am #109176

GlenPeake
Participant

Julian Cohen wrote:

Nick Radge wrote:

I have done 98 trades in three years myself. Frequency changes depending on market conditions.

Glen, do you use Wealthsafe?

I’m with eSuperfund. https://www.esuperfund.com.au

September 18, 2018 at 6:46 am #109165

JulianCohen
Participant

Thanks everyone. Appreciate the input.
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