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April 2023
Estate planning and smsf
29/04/2023

Estate Planning and SMSF : Leveraging the Power of SMSF

Estate planning and SMSF can play a large role when it comes to Estate planning, which is an often-overlooked aspect of financial planning when executing your Will, superannuation, and wishes.

Estate planning determines how your assets will be distributed once you pass away. However, estate planning can be complicated and overwhelming, which is why Self-Managed Super Funds (SMSFs) have become popular.

SMSFs are a powerful tool for estate planning and managing your retirement savings.
Whether you’re new to estate planning or simply looking for a more efficient way to manage your assets, leveraging the power of SMSF can help you achieve your financial goals and ensure that your assets are distributed according to your wishes.

estate planning

Understanding SMSF and its benefits for estate planning

SMSF is a type of super fund that is managed by its members. It provides more flexibility and control over your retirement savings compared to the public APRA super funds. SMSFs can invest in a wide range of assets, including property, shares, and managed funds. This makes them a popular choice for those who want to take a more active role in managing their retirement savings and buy property direct.

Estate planning and SMSF provide benefits for estate planning that should not be overlooked. Unlike other super funds, SMSF members have more control over how their assets are distributed after their passing. With an SMSF, you can nominate who receives your benefits and how they are distributed. This means your assets can be distributed according to your wishes, which can provide peace of mind for you.

SMSF vs. other estate planning options

An SMSF forms part of a structure to manage your estate planning wishes. This, combined with your wills, a family trust and other measures, ensure the correct outcome.

SMSFs also provide tax benefits for estate planning. For example, assets held in an SMSF are not subject to capital gains tax (CGT) when they are sold after the member’s death. This can provide significant tax savings for your beneficiaries.

Creating an estate plan using SMSF

Creating an estate plan using SMSF involves several steps.

We first must look at the Fund’s assets and the members’ wishes. Look at the age and composition of your SMSF . Are there others in the Fund that may continue after your death?


Those in pension mode may choose to allow the Death Benefits to be rolled over to a remaining dependent in the fund via the use of a reversionary pension. The advantage to this is that the benefit does need to come out of Super.


Other members may choose to prepare a binding death benefit nomination (BDBN). This legal document specifies who will receive your benefits and how they will be distributed after your passing.
When creating a BDBN, it’s important to consider the needs of your beneficiaries. For example, you may want to provide for your spouse’s retirement needs or ensure that your children receive an education. You should also consider the tax implications of your estate plan and how they will affect your beneficiaries.
Once you have created a BDBN, you should review it regularly to ensure it still reflects your wishes. You should also keep your beneficiaries informed of your estate plan so they know what to expect after your passing.

Understanding who is a dependent for Superannuation purposes

Under the Superannuation Industry (Supervision) Act 1993 (SIS), benefits may be paid to one or more of the member’s dependants or their legal personal representative (LPR), i.e. the estate, subject to the fund’s governing rules.(check Trust Deed)

A dependant for these purposes (known as an SIS dependant) includes:
• the member’s spouse – legally and de facto
• the member’s child (of any age), and
• someone with whom the member has an interdependency relationship (generally someone with whom the member has a close personal relationship and lives, and where one or each of them provides the other with domestic support and personal care).

A “SIS dependant “also includes someone who is a dependant within the ordinary meaning of that term (an ‘ordinary meaning’ dependant), such as a person who may not be a spouse or child but who depends on the member financially. If an individual is not an SIS dependant, they can only receive a member’s death benefits via the deceased member’s estate.

Common mistakes to avoid in SMSF estate planning

There are several common mistakes to avoid when creating an estate plan using SMSF.

These mistakes include:
• Failing to create a BDBN: Without a BDBN, your benefits may not be distributed according to your wishes.
• Failing to understand who may control your SMSF after your death.
• Failing to have your Trust Deed updated regularly and referring to this in the Estate planning process.
• Best practice is to have a corporate trustee
• Failing to set up the right pension and the conflict between DBBN and reversionary pension.
• Failing to recognize who is dependent vs nondependent.
• Failing to review your estate plan regularly: Your circumstances may change over time, so it’s important to review your estate plan regularly to ensure it still reflects your wishes.
• Failing to keep your beneficiaries informed: Your beneficiaries should be informed of your estate plan, so they know what to expect after your passing.

Choosing the Right Accountant for estate planning

Choosing the right SMSF provider is important for estate planning. You should look for a provider that has experience in estate planning and can provide professional advice.
Our role at Gartly Advisory is to help advise Trustees in the Estate Planning process.
In many cases, we will assist the Trustee in the decision process of whether it is appropriate to wind up the SMSF and to be strategic about their estate planning and smsf.

SMSF estate planning checklist

To help you create an estate plan using SMSF, here’s a checklist of things to consider:
• Create a BDBN and make sure your will works in conjunction with your super strategy
• Review your estate plan regularly.
• Brief your POA and appointer legal representative of your wishes post death as they should be appointed to your SMSF to act post death
• Keep your Deed up to date.• Keep your beneficiaries informed.
• Consider the tax implications of your estate plan
• Choose the right SMSF provider
Estate planning should not be overlooked.

By leveraging the power of SMSF, estate planning can give estate planning control over your retirement savings and can be used to create a tax-efficient estate plan. Peace of mind knowing that your superannuation ends up with the right loved ones is a powerful aspect of having an estate plan.

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business plan
08/04/2023

How can I make my small business successful?

How can I make my small business successful is something all business owners strive to do. The road to success is not always smooth, and there are obstacles to overcome. However, with the right strategies and mindset, you can achieve your goals and thrive in today’s competitive marketplace.

In this article, we’ll explore some key tips and tactics that can help you take your small business to the next level. From defining your niche and target audience to creating a strong brand and building a solid online presence, we’ll cover everything you need to know to make your small business a success.

Defining my small business successful vision


Before we dive into the strategies that can help your small business succeed, it’s essential to understand what success means to you. Success means different things to different people, and what may be considered successful to one person may not be to another. For some, success may mean financial independence, while for others, it may be the ability to make a positive impact in the world.
Regardless of what success means to you, it’s crucial to have a clear idea of what you’re aiming for. Setting clear goals and objectives will help you stay focused and motivated as you work towards achieving your vision. It’s also essential to track your progress regularly and make adjustments where necessary.

The importance of a business plan

Having a solid business plan is essential for any small business growth. A business plan is a written and outlines your business goals, strategies, and financial projections. It serves as a roadmap for your business and helps you stay on track as you work towards achieving your goals.
A business plan should include a description of your business, your target market, your competition, your marketing strategy, and your financial projections. It should also outline your unique value proposition and how you plan to differentiate yourself from the competition.
A well-crafted business plan can help you secure funding, attract investors, and make informed decisions about the direction of your business. Our team can help you here.

Understanding your target audience

Knowing your target audience is crucial for the success of your small business. Your target audience is the group of people who are most likely to buy your product or service. Understanding their needs wants, and preferences are essential for creating a marketing strategy that resonates with them.

Once you have a clear understanding of your target audience, you can tailor your marketing messages, product offerings, and customer service to meet their needs.

Developing a unique value proposition

A unique value proposition (UVP) is what sets your business apart and helps with small business growth. It’s the reason why customers should choose your product or service over others. Your UVP should be concise, clear, and compelling.

To develop a UVP, start by identifying your target audience’s pain points. Then, think about how your product or service can solve those problems or meet those needs. Your UVP should communicate the benefits of your product or service in a way that resonates with your target audience.
Your UVP should be prominently displayed on your website, marketing materials, and social media

channels. It should be a key part of your brand identity and messaging.

Building a strong brand identity


A strong brand identity is essential to make a small business successful. Your brand identity is how your business is perceived by your target audience. It includes your logo, colour scheme, messaging, and overall aesthetic.

To build a strong brand identity, start by defining your brand values and personality. Think about what you want your brand to represent and how you want to communicate with your target audience. Your brand identity should be consistent across all your marketing materials, from your website to your social media channels.

Crafting a marketing strategy

A marketing strategy helps in reaching and engaging with your target audience. It is the fertaliser for small business growth. It includes the tactics and channels you’ll use to promote your product or service. A marketing strategy should be tailored to your target audience and should align with your business goals.

Leveraging technology to streamline operations

Technology can be a powerful tool for streamlining your business operations and improving efficiency. There are many software solutions available that can help you automate tasks, manage inventory, and track customer data.

Investing in a customer relationship management (CRM) system can also help you keep track of customer interactions and improve customer service. A CRM system can help you identify patterns in customer behaviour and tailor your marketing messages to their needs and preferences.

Managing finances, and taxes effectively find a good small business accountant

Managing your finances effectively is crucial in making your small business successful. It’s essential to keep track of your income and expenses, create a budget, and plan for unexpected expenses.
Investing in accounting software can help you automate financial tasks and generate reports that provide insight into your business’s financial health. At Gartly Advisory we love working with small businesses. It’s important to work with an accountant advisor who can help you make informed decisions about managing your finances, taxes and your future.

Understand where you are in areas such as:

  • Taxes
  • Profitability
  • Your future
  • And the value of your business

Take our 13-minute in-depth Value Builder quiz and get your free report

Continuously adapting and evolving


Lastly, it’s important to remember that making your small business successful is not a one-time event. It’s a continuous process of adapting and evolving to meet the ever-changing needs of your target audience and the marketplace.

Building a successful small business takes hard work, dedication, and a bit of strategy. By defining your niche and target audience, developing a unique value proposition, building a strong brand identity, and crafting a marketing strategy, you can create a business that resonates with your target audience and stands out from the competition.

Leveraging technology to streamline operations, building a strong team, managing finances effectively, and continuously adapting and evolving can help you stay ahead of the curve and achieve your business goals. Remember, success is not a destination; it’s a journey. Stay focused, stay motivated, and keep moving forward.

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06/04/2023

April 2023 – Gartly Newsletter

Welcome to our April 2023 Newsletter. Our newsletter this month contains tax issues such as :

  • Clarity on Trust Distributions
  • the new rules on $3m Super balances
  • Electric cars exempt from FBT
  • How to Spot a Crypto Scam
  • GST Audits and How to avoid them
  • How to find lost Super

Press here to access our latest newsletter

Paying a Franked Dividend
01/04/2023

Should I Pay a Dividend from my company or Keep the Profits in My Company?

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Dividend vs keeping the profits in retained earnings

Should I pay a dividend from my company? When it comes to running a successful business, one of the most important decisions you’ll have to make is what to do with your profits. Should you pay a dividend to yourself as the business owner, or reinvest the money back into the company? It’s a question that many business owners struggle with, and there’s no one-size-fits-all answer.

We argue that paying dividends is a great way to reward the owners.

Others believe that reinvesting profits is the key to long-term growth and success. In this article, we’ll explore the pros and cons of both options, so you can make an informed decision that’s right for your business.

Understanding Dividends and How They Work

First, let’s define what a dividend is. A dividend is a payment made by a company to its shareholders, usually in the form of cash or additional shares or allocated to the loan account. Dividends are paid out of a company’s profits and are distributed on a regular basis, such as quarterly or annually.

There are different types of dividends, such as regular dividends, and special dividends.

Regular dividends are the most common type and are paid out on a regular basis. Special dividends are a one-time payment made by the company, usually when the company has extra profits. Stock dividends are paid in the form of additional shares of stock instead of cash.

Pros and Cons of Paying Dividends to Shareholders

Now that we know what dividends are, let’s explore the advantages and disadvantages of paying dividends to shareholders.

Advantages of Paying Dividends

One of the main advantages of paying dividends is that it can be a great way to reward you as the owner. Shareholders receive a share of the company’s profits, and this can help to attract new investors and retain existing ones.

Importantly paying dividends reduces Retained Earnings. This reduction in retained earnings for a small business helps :

  • The flow of profits for tax purposes
  • The impact of holding too much capital that exposed if there is a legal claim against the company.

Disadvantages of Paying Dividends

One of the main disadvantages of paying dividends is that it can limit the company’s ability to reinvest in the business. When a company pays a dividend, it’s taking money out of the company that could be used to fund growth initiatives or invest in new projects. If the company doesn’t have enough cash to fund these initiatives, it may need to raise additional capital through debt or the owners lending money back

Another disadvantage of paying dividends is that it can create expectations among shareholders. If a company pays a dividend, shareholders may expect the company to continue paying dividends in the future.

Advantages and Disadvantages of Keeping Profits in the Company

Now, let’s explore the advantages and disadvantages of keeping profits in the company, rather than paying dividends.

Advantages of Keeping Profits in the Company

One of the main advantages of keeping profits in the company is that it allows the company to reinvest in the business. By reinvesting profits, the company can fund growth initiatives, invest in new projects, and improve its products or services. This can help to increase the value of the company over time and attract new investors.

Keeping profits in the company can also help to reduce the company’s reliance on external financing. If the company has enough cash to fund its growth initiatives, it may not need to raise additional capital through debt or equity financing. This can help to reduce the company’s debt load and improve its financial health.

Disadvantages of Keeping Profits in the Company

One of the main disadvantages of keeping profits in the company is that it can inhibit profit reward and extraction. If the company doesn’t pay a dividend, shareholders won’t receive a share of the profits in the short term.

As the owner this has 2 serious disadvantages

  • NO reward in short term for your hard work
  • Taxation – distributing in a regular method allow better tax planning
  • Not declaring a divided but still taking the money may create a DIV 7a loan – not advisable

Another disadvantage of keeping profits in the company is that it can create excess cash that isn’t being used effectively. A business owner should have a clear plan for how to reinvest its profits. If not, it may be better to distribute the profits to shareholders in the form of a dividend.

Finally take profits as you go and dont leave it for someone else if something goes wrong ie liquidation or legal action . Paying out dividends is like passing the gate way of no return. Be careful though as declaring a dividend with poor trading can lead to insolvent trading!

Criteria for Deciding Whether to Pay Dividends or Keep Profits

Let’s look at some criteria for deciding which option is best for your business.

Analyzing the Financial Health of the Company

One important criterion for deciding whether to pay dividends or keep profits in the company is the financial health of the business. If the company is financially stable and has excess cash, it may be a good idea to pay a dividend. However, if the company is in a growth phase and needs to reinvest profits to fund growth initiatives, it may be better to keep the profits in the company.

Considering the Company’s Growth Potential

Another important criterion is the company’s growth potential. If the company has a high growth potential, it may be better to reinvest profits in the business. Thereby funding growth. However, if the company doesn’t have many growth opportunities, it may be better to pay a dividend . Reward shareholders and extract the excess cash from the business.

Evaluating the Shareholder’s Preferences

Finally, it’s important to consider the preferences of the company’s shareholders. Some shareholders may prefer to receive a dividend, yet the other business owner may prefer to see the company reinvest profits in the business. It’s important to understand the preferences of the company’s shareholders and make a decision that’s in their best interests.

Look at the Franking account as a small business and see how this may impact your future tax liability personally. Remember declaring a franked dividend have credits attached. However, while tax is paid with the lowering of the company tax rate there may be top-up tax payable

Top-up tax is effectively the shortfall of tax that may be incurred in the event that a shareholder is on a higher tax rate ie tax credits typically for small business is @ 25% but you may have taxpayers on higher rates such as 32.5% and beyond

Conclusion and Final Thoughts on the Dividend vs. Profit Debate

In conclusion, the decision to pay a dividend or keep profits in the company is a complex one that requires careful consideration of the company’s financial health, growth potential, and shareholder preferences. While paying dividends can be a great way to reward shareholders and attract new investors, reinvesting profits can be the key to long-term growth and success. Ultimately, the decision will depend on the unique circumstances of each business. By weighing the pros and cons of each option and considering the criteria outlined in this article, business owners can make an informed decision that’s right for their company.

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