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Beware segregated pension traps

Posted on Aug 9, 2015 by editor

Applying the segregated pension method for an SMSF can result in cash-flow issues caused by the division of earnings and expenses.

While the decision to segregate assets in an SMSF into pension and accumulation mode may be due to tax purposes, there are still a range of important issues to consider.

Bank accounts are usually the biggest issue with segregating an SMSF into pension and accumulation pools. If an SMSF trustee has one account, they must be able to keep track of everything since every dollar earned from every asset will go into that one bank account. However, two separate bank accounts can also be problematic. Having two accounts can make it hard to determine how you direct the right income to the right bank account.

Since dividends are paid to bank accounts, SMSF trustees may also have to provide the share registry with two accounts. This means two different broking accounts are required for shares from the same company.

ATP Accounting knows what it takes to run a successful business. They will position you at the cutting edge of business growth.
Take the step and get help to grow your business, minimise tax and protect your hard-earned assets.
Call us today on (02) 8850 3888, send us an email to or send us a message here.

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