FPE016 Self Managed Superannuation Funds

Assignment Help on Research Questions

Assignment Instructions

Assignment marks: 100

Total marks: 100

Total word limit: 2,000 words Weighting: 40%

Assignment details

• This assignment covers Topics 1 to 7 and accounts for 40% of your final grade.

• There are two (2) research questions in this assignment. You should answer all questions within each of the questions.

• Refer to the Criteria-Based Marking Guide for guidelines on what is expected for each question.

• Full workings must be shown for all calculations. Show all calculations in the text of your assignment and not attached as an appendix. Appendices to the assignment will not be read.

• Answers are to be in your own words. Reference and cite all your sources (within the text of your answer) when quoting or using material from external sources. Include a reference list at the end of your assignment. For further information on referencing, refer to the ‘Referencing and Research’ page in the ‘Build Your Skills’ hub in KapLearn.

• Indicative weightings are noted beside each question. Use these weightings to assist you with your allocation of time and resources. The weightings indicate the relative importance of each question.

• State all assumptions used in providing your answer.

Policies

• The overall word limit for the assignment is 2,000 words. Marks will only be awarded for answers up to the word limit (plus 10%) for each question. Any material written after this will not be counted towards your mark for that question. Headings, quotes and references within the body of the answer are included in the word count. Numerical tables, calculations, and reference lists are not included. For more information on word counts and their rationale, go to Assessment à Assignment à Assessment Preparation Guide.

• The Assessment Preparation Guide contains information about format and presentation,

word limits, citations and referencing, collusion, plagiarism and other policies, useful resources, submitting your assignment and accessing your results.

• Follow the Harvard referencing style as recommended in Kaplan Australia: Harvard Referencing Guide located on the ‘Referencing and Research’ page in the ‘Build Your Skills’ hub in KapLearn.

• Requests for special consideration or information pertaining to special consideration written in the body of the assignment will not be considered by the assessor. Refer to the

‘special consideration’ section of the Assessment Policy on Kaplan’s website for more information.

Independent research

For some or all questions in this assignment, you will be required to complete independent research beyond the provided materials. You will also be expected to analyse this research and use it to support your own reasoned conclusions.

This includes:

consideration of multiple sources beyond topic notes or other provided resources
sources included are academically sound and credible
analysing and understanding the argument or information the source presents
using the material appropriately to directly support your

Where significant independent research is required for a given question, it will be clearly indicated in the question instructions and the Criteria-Based Marking Guide.

There are two (2) research questions in this assignment.

Question 1 Fund structure and the provision of SMSF advice (40 marks | Word limit: 800 words)

LO1 Determine the role of a financial adviser throughout the lifecycle of an SMSF.

LO2 Compare the distinguishing characteristics of an SMSF and a regulated super fund.

LO4 Evaluate the reasons for providing pensions via an SMSF and the operation of superannuation interests as they apply to SMSFs.

LO5 Recommend SMSF fund administration, estate planning and taxation implications.

LO6 Judge the suitability of strategies that integrate relevant and ethical advantages of an SMSF.

Note: You are required to undertake independent research to answer the following questions.

George (aged 48) and Joanna (aged 46) are a married couple who own a refrigerated transportation business run via their family trust. George is a qualified long-haul truck driver and has been working in the business for the past 20 years after originally joining his father, who has recently retired. He has accumulated $300,000 in his retail superannuation fund by maximising his employer contributions over his period of employment and investing in a high-growth strategy. Joanna runs the office of the business and has $100,000 in superannuation in the retail fund in a balanced portfolio. Joanna took a number of years off work to raise their two children, Helen (16) and mark (14). George and Joanna also have a residential property valued at $1.6 million with a mortgage of $700,000. They have no other debts.

George and Joanna are considering establishing a self managed superannuation fund (SMSF) so they have greater control over their retirement benefits. They have come to you for advice.

Discuss with George and Joanna the issues they need to consider regarding the establishment and ongoing management of an SMSF. Explain your role as an adviser and limitations to your service offering relating to SMSFs — you are able to provide advice but not ongoing administration. In your answer identify the pros and cons of having an SMSF, what service providers you would recommend they use for their SMSF

(and why) and the appropriate structure for their SMSF.

Question 2 SMSF investment strategy — growing the fund via contributions and acquiring business real property and other assets from a related party (60 marks | Word limit: 1,200 words)

LO1 Determine the role of a financial adviser throughout the lifecycle of an SMSF.

LO3 Formulate investment strategies which demonstrate integrating knowledge of various investment standards that are unique to the operation of an SMSF.

LO6 Judge the suitability of strategies that integrate relevant and ethical advantages of an SMSF.

Note: You are required to undertake independent research to answer the following questions.

As it currently stands, George and Joanna have fairly different investment outlooks in their existing superannuation arrangements. In addition, they own, via the family trust, the premises from which the business is run, which consists of one title valued at $900,000 with a cost base of $400,000. They also own a joint share portfolio valued at $80,000 with a cost base of $50,000. Their total net assets, including a number of trucks owned by the business, is $4 million.

They want advice about whether they can get the property into the SMSF and what compliance issues might arise if they are able to transfer it. They also want to know how they can maximise their member balances via contributions. As their adviser, you need to address the following issues:

Are they able to acquire the property from themselves? (20 marks)
Discuss the contribution issues associated with acquiring the property — how much they contribute, what types of contributions they can make, and if there are any other (20 marks)
If they are unwilling to transfer the property into the fund via a contribution, what other options do they have with regards to transferring the property into the SMSF? (20 marks)