News

Investments

Vigilance key for SMSFs investing overseas

As SMSFs increasingly participate in overseas investments, it is vital the tax consequences and structuring of such opportunities are considered and understood, but importantly advisers must be monitoring rules continuously in case of any changes.

“If we look at the United Kingdom, there have been a lot of changes to stamp duty recently and that also expands to inheritance tax and inheritance tax has been changing on a six to 12-monthly basis in the last three to four years, and the pace of change means it just keeps going,” Pitcher Partners tax consulting executive director Denise Honey told the Tax Institute’s National Superannuation Conference in Sydney last Friday.

“So don’t assume once you’ve got a handle on this that that’s the way it’s always going to be.

“It’s really something you need to be vigilant about and because there has been so much change, you really need to find an adviser who’s on top of it.”

Honey said the decision to invest overseas boiled down to how the structuring could be done for the SMSF.

“There’s risk management to do and from relatively simple examples of SMSFs investing in the United States and the UK, it can still be a minefield,” she noted.

“I think there’s quite a lot of homework in terms of really scoping out what are all the potential issues in a foreign jurisdiction and what are the taxes and what are the client’s costs.

“The foreign exchange control rules, restrictions on foreign ownership of assets and less well-developed and organised tax revenue authorities of the US, the UK and some Asian countries can be hard to navigate and more difficult to deal with.

“And I think that’s something that has to be factored into the costs and risks of making investments overseas.”

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital