Segregating Assets in SMSF

SMSFs can use segregation to separate the assets of the fund for several reasons. It can be done to separate the assets between accumulation phase interests and retirement phase interests for the purposes of determining the income of the fund that is exempt from tax. Alternatively, it can be used to separate member’s investment portfolios for any number of reasons. This bulletin will look to identify the main reasons for segregating fund assets, what circumstances prevent segregation being used, how segregation is implemented from a practical administrative perspective and identify the alternative to calculating the income tax exemption where segregation is either not preferable or not allowed under the legislation.