SO THEY'RE COMING FOR IT AT THE END

Not All Of It.

The drawdown calculator — will your fund be able to pay its minimum pension without selling the property, and what does Division 296 actually cost you?

JP O’Connorinvestmate.com.au

The SMSF Handbooks  •  Getting out

Your fund at retirement

Division 296

Realised earnings only. 15% extra above $3m, 25% above $10m. Both thresholds indexed.

The liquidity test

—
When the fund runs out of cash
—
Minimum pension this year
—
Income this year
—
Gap
—
Liquid you should hold

Minimum pension against income

Orange is the minimum you must draw. Green is what the fund earns. Where orange passes green, you are eating capital.

Year by year

The minimum rises with age. Rent does not rise as fast.

AgeMinimum %Minimum $ IncomeGapCash left
Before you rely on this. This is arithmetic, not advice. Missing a minimum pension payment can cause the ATO to treat the pension as having ceased on 1 July, costing the fund its tax exemption for the whole year. Division 296 is assessed to you personally, not the fund. Take the questions in Appendix B to your accountant.