With less than four days until 30 June, SMSFs have been told not to postpone speaking to an adviser about their circumstances and any planning opportunities in relation to the imminent super changes.
Clime Asset Management managing director John Abernethy summarised five key points to consider before the federal government’s superannuation reforms come into effect from 1 July.
“Review your contributions – the 2016/17 financial year will be the last opportunity for individuals to utilise the higher contribution limits of $30,000 or $35,000 concessional contributions and the $540,000 non-concessional contributions under the three-year bring-forward rule,” Abernethy said.
“Then undertake tax and estate planning.
“Individuals with pension account balances above the $1.6 million balance transfer cap will need to consider the actions they wish to take, if any, prior to 30 June.
“It’s important to understand the impact the changes will have on a fund in conjunction with personal circumstances.”
Clime recommended ensuring minimum pension payments were met for the current year and to consider additional lump sum payments if required.
Abernethy also suggested reviewing the transitional capital gains tax (CGT) relief rules in conjunction with the cost base of fund assets as at 30 June.
“This is only applicable to balances over $1.6 million and transition-to-retirement income stream (TRIS) pensions,” he noted.
“Also note that the election is not due until the time of lodgement of the tax return.”
Another item on the 30 June checklist was whether clients had a TRIS, as they may no longer be worthwhile for some individuals as the pension exemption on associated earnings will be removed from 1 July.
“It is therefore important to review whether to continue current TRIS arrangements or to revert to accumulation mode,” Abernethy said.
“Lastly, take advantage of small business concessions.
“The small business CGT cap and various concessions still continue to apply and they provide a significant opportunity for eligible individuals to contribute additional amounts into their super beyond the standard contribution caps.”