Question 1. We are a two director Corporate SMSF. Both current in pension and accumulation, thanks to the imposed caps. Can you please tell me whether any capital losses in our SMSF can be utilised by our estate against capital profits on the closure of the SMSF at our demise and payment of funds as per our wills? We acknowledge, of course, that current rules may change before this event occurs, given the regular messing about with superannuation and SMSF rules in particular.
Answer (by Graeme Colley, Executive Manager, SMSF Technical & Private Wealth at Super Concepts): The calculation of taxable capital gains and losses is calculated on a ‘taxpayer’ by ‘taxpayer’ basis. In the case of your SMSF, any capital losses that have been carried forward or occur in the relevant year can only be applied against further capital gains that have been made by your SMSF. If you are winding up your SMSF and there are carry forward capital losses at that time, they can’t be applied against the capital gains of any other ‘taxpayer’ such as your estate.
Question 2. I have an SMSF that has relied heavily on franking credits. I have some decisions to make about rebalancing my shareholding if (when) Labor gets elected. What happens to the franking credits on retained profits that are not given to shareholders each year? Are these accumulated by the company and what can they do with them? Is it likely that these could be distributed to shareholders before the end of the year in the case of the Big Banks?