Assessor Resource

FNSSMS602A
Apply taxation requirements when advising in self-managed superannuation funds

Assessment tool

Version 1.0
Issue Date: May 2024


This unit applies to the role of an adviser regarding taxation of a self-managed superannuation fund and is limited by whether or not they are a registered tax agent.

This unit covers the skills and knowledge required to apply taxation requirements when advising clients/trustees in self-managed superannuation funds. It does not encompass taxation planning but does encompass identifying and providing explanation of self-managed superannuation fund taxation requirements, with specific relation to investment product decisions within the fund.

Importantly, this unit is not about the provision of taxation planning advice. Instead it is limited to advising on the potential taxation implications of particular products being considered for the fund.

This unit is applicable to individuals working within enterprises and job roles subject to licensing, legislative, regulatory or certification requirements including legislation administered by the Australian Securities and Investments Commission (ASIC).

You may want to include more information here about the target group and the purpose of the assessments (eg formative, summative, recognition)

Co-Requisites

FNSSMS603A

Apply legislative and operational requirements to advising in self-managed superannuation funds

Employability Skills

This unit contains employability skills.



Evidence Required

List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the ability to:

interpret and apply SIS legislation, ATO guidelines and legislation regarding self-managed superannuation funds

explain fund taxation requirements and implications for contributions and benefits

identify and explain implications for fund income and assets.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment

access to and the use of a range of common office equipment, technology, software and consumables

access to organisation financial records

access to organisation policies and procedures.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

evaluating an integrated activity, which combines the elements of competency for the unit, or a cluster of related units of competency

observing processes and procedures in workplaces

verbal or written questioning on underpinning knowledge and skills

evaluating samples of work

accessing and validating third party reports

setting and reviewing workplace business simulations or scenarios.

Guidance information for assessment

Submission Requirements

List each assessment task's title, type (eg project, observation/demonstration, essay, assingnment, checklist) and due date here

Assessment task 1: [title]      Due date:

(add new lines for each of the assessment tasks)

Assessment Tasks

Copy and paste from the following data to produce each assessment task. Write these in plain English and spell out how, when and where the task is to be carried out, under what conditions, and what resources are needed. Include guidelines about how well the candidate has to perform a task for it to be judged satisfactory.

Required skills

highly developed communication skills to:

liaise with others, share information, using questioning and active listening as required

use language and concepts appropriate to cultural differences

well-developed numeracy and IT skills to:

use a range of mathematical ideas and techniques related to taxation

perform calculations related to taxation implications

access and use appropriate software such as word processors, spreadsheets and databases

use internet information

well-developed literacy skills to read and interpret documentation from a variety of sources and record and consolidate related information

interpersonal skills to relate effectively within a team environment

organisational skills, including the ability to plan and sequence work

research and analysis for:

accessing, interpreting and managing complex information

comprehending self-managed superannuation fund SIS legislation

identifying relevant legislation and regulations relevant to each client

assessing the accuracy and relevance of information

self-management skills for complying with ethical, legal and procedural requirements

learning skills to maintain knowledge of changes to compliance legislation and requirements

problem solving skills to address compliance and taxation issues

judgement skills for forming recommendations in operational situations

Required knowledge

ATO requirements regarding self-managed superannuation funds

capital gains treatment for investment earnings (accumulation and pensions)

fund residency and complying status for tax purposes

general taxation of investment earnings (accumulation and pension)

PAYG and GST considerations relating to self-managed superannuation funds

Superannuation Industry (Supervision) (SIS) Act and key legislative requirements regarding self-managed superannuation funds

superannuation surcharge considerations and reporting issues

tax deductions available to, and taxation of income streams from self-managed superannuation funds

taxation treatment of:

self-managed superannuation funds contributions

complying and non-complying pensions (taxation and social security issues)

death benefits (lump sum and pension issues)

franking credits (accumulation and pensions)

reserves and residual fund assets

rollovers, including in specie issues

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Sources of taxation information may include:

ATO

Australian Securities and Investments Commission (ASIC)

courts

dealers

existing or proposed trust deeds

fund managers

industry bodies

legislation

licensees

professional associations

regulations

relevant Commonwealth, State and Territory Government organisations

self-managed superannuation fund specialists.

Taxation and other requirements may include, as amended:

anti-discrimination legislation

Corporations Act

Family Law Legislation Amendment Superannuation Act

Financial Services Reform Act (FSRA)

Income Tax Assessment Act

industrial legislation

Insurance Act

Privacy Act

Retirement Savings Account Act

stamp duty legislation

Superannuation (Resolution of Complaints) Act

Superannuation (Unclaimed Moneys and Lost Members) Act

Superannuation Contributions Tax (Assessment and Collection) Act (surcharge)

Superannuation Guarantee (Administration) Act (SGAA)

Superannuation Industry (Supervision) Act (SIS)

Superannuation Industry (Supervision) Regulations

trade practices legislation

Trustee Acts or Trust Acts in each State and Territory

other relevant State or Territory and Commonwealth legislation.

Investment restrictions may include:

acquiring assets from 'related parties' parties of the fund

borrowing by superannuation funds

certain specified investments after 11 August 1999

existing investments at the 11 August 1999

in-house assets

investments made between 11 August 1999 and December 1999

lending to members and their relatives

making and maintaining investment on an arm's length basis

related party of a fund.

Risk may include:

divorce

exceeding age-based limits

exceeding RBL limit.

Adviser may include:

all natural persons who provide self-managed superannuation fund advice to individuals or self-managed superannuation fund trustees

any representative of a licensee

employee or owner.

Restriction and identification of allowable credits are provided in tax advice legislation and may include:

foreign taxation credits

franking credits.

Deductions may include:

accountants' fees

auditors' fees

financial planning fees

insurance

investment manager fees

legal fees.

Copy and paste from the following performance criteria to create an observation checklist for each task. When you have finished writing your assessment tool every one of these must have been addressed, preferably several times in a variety of contexts. To ensure this occurs download the assessment matrix for the unit; enter each assessment task as a column header and place check marks against each performance criteria that task addresses.

Observation Checklist

Tasks to be observed according to workplace/college/TAFE policy and procedures, relevant legislation and Codes of Practice Yes No Comments/feedback
The importance of receiving complete advice on taxation requirements and implications for fund and appropriate providers/referrals for specialist advice are identified 
Scope and authority of taxation information able to be provided are explained to the client/trustee 
Sources of taxation information appropriate to self-managed superannuation funds are identified 
Taxation and other requirements that apply to trustee and self-managed superannuation fund structures within the scope of authority are explained to the client/trustee 
Clients/trustees are informed of the role of the Australian Taxation Office (ATO) in regulating/supervising self-managed superannuation funds 
Clients/trustees are informed of fund residency requirements for taxation purposes 
Appropriate providers/referrals of taxation advice are identified and scope of taxation information on contributions able to be provided is explained 
Clients/trustees are informed of the types of allowable contributions that the self-managed superannuation fund can claim and investment restrictions 
Taxation treatment of contributions to self-managed superannuation funds is explained to the client/trustee 
Taxation concessions for the contributor are identified and explained to the client/trustee 
Taxation impacts and risks regarding the selection of various contributions are reinforced to client/trustee 
Client/trustee is informed of the treatment of rollovers, including 'in specie contribution' issues 
The client/trustee is informed to seek advice for higher level/specialist advice if required 
The importance of receiving complete advice on implications for fund income and assets is identified 
Appropriate providers/referrals for this specialist advice are identified 
The treatment of reserves and residual fund assets are explained to the client/trustee within scope of adviser authority 
Client/trustee is informed of taxation implications and benefits relating to investment earnings including capital gains tax (accumulation and pensions) within scope of adviser authority 
Goods and Services Tax (GST) and Pay As You Go (PAYG) implications for fund income, expenditure and benefit payments are explained to the client/trustee within scope of adviser authority 
Fund tax deductions available to self-managed superannuation funds for clients/trustee are identified within scope of adviser authority 
Fund credits for clients/trustee are identified within scope of adviser authority 
Client/trustee is informed of the treatment of franking credits (accumulation and pension within scope of adviser authority 
The impact of deductions on fund taxation outcome is explained to clients/trustee within scope of adviser authority 
Treatments of lump sum Eligible Termination Payment (ETP) payments (tax calculations, tax reporting) considerations are explained to the client/trustee 
The client/trustee is advised of the superannuation surcharge considerations and reporting issues 
Taxation of income streams paid to the individual from the self-managed superannuation funds is explained to client/trustee within scope of adviser authority 
The client/trustee is informed of the treatment of death benefits, and binding, non-binding or no beneficiary nominations (lump sum and pension issues) within scope of adviser authority 
The client/trustee is made aware of treatment of complying and non-complying pensions (taxation and social security) issues within scope of adviser authority 
The client/trustee is informed of the different Reasonable Benefit Limit (RBL) treatments and reporting issues pertaining to self-managed superannuation funds 
The client/trustee is informed to seek advice for higher level/specialist advice if required 

Forms

Assessment Cover Sheet

FNSSMS602A - Apply taxation requirements when advising in self-managed superannuation funds
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Assessment Record Sheet

FNSSMS602A - Apply taxation requirements when advising in self-managed superannuation funds

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