Tax Planning - SMSF News

Our SMSF Specialist Advisor - Tony Beckett has pulled together some key things you need to take into consideration when working with your SMSF.  .  

With June 30 2018 fast approaching this will be the first full financial year post superannuation reforms that came into effect July 1 2017.

Some important numbers if considering maximising your contributions for the 2018 financial year.

Change in Non-Concessional Limits (NCC)

• These have been reduced from $180K per year ($540K utilising the bring forward rule) to $100K ($300 utilising the bring forward rule). This is also assuming you have room under the total superannuation balance (TSB) of $1.6M to contribute this type of contribution 

Change in Concessional Contributions (CC)

• These have been reduced to $25K from July 1 2017. In previous years they were $30K or $35K depending on your age. 
• Previously only the self-employed could claim a personal tax deduction for concessional contributions made. The 2018 financial year sees the first year in which anyone is able to top up their concessional contributions to the cap of $25K and be able to claim these as a deduction in their individual names. 

Another new way of getting money into super is the addition of downsizer contributions. Now while these only come into effect from July 1 2018 these could influence the sale of a property approaching the end of the financial year. There are rules and conditions imposed on this type of contribution and some of these are as follows

• The downsizer cap is $300,000 per member 
• The contributor must be 65 years or more. The 1.6M TSB does not come into effect with this contribution nor does the work test have to be satisfied for this type of contribution to be made. 
• The contribution must be made within 90 days after the change of ownership occurs. 
• The contribution must be all or part of the capital proceeds from the sale of a dwelling in Australia, which is not a caravan, houseboat or other mobile home. 
• The contributor, their spouse or former spouse must have owned a interest in the property for the10 years prior to sale 
• An interesting point on this contribution is that there is no actual requirement to ‘downsize’ or even buy another property 

Some other very important considerations are needed prior to making any NCC’s for the 2018 financial year. The TSB! 

Remember the ability to make NCC’s to superannuation is based on the members TSB. If you are approaching the $1.6 million cap and have more than 1 super fund it is essential that you calculate TSB of all of the funds as at June 30 2017 (it does not work on a fund by fund basis. It is an all-encompassing 1.6m cap). This will determine the amount available in NCC’s that can be made for the 2018 financial year.

There needs to be a lot more care and consideration taken when it comes to contributing to super prior to June 30 2018. If you have any questions in relation to any of the above information do not hesitate in contacting the DC Advisory Group team.

Useful information 

• SMSF Myths Busted - Fact Sheet
• Personal Superannuation Contributions - Fact Sheet

This article is provided as general information only and does not consider your client’s specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of a client's specific circumstances.