The SMSF Association has called on SMSF trustees to take action now if they want to use the capital gains tax (CGT) relief provisions contained in the super reforms as part of their strategy to comply with the new transfer balance cap.
“Some SMSF trustees have a false belief that CGT relief can be applied for at any stage during this financial year; this is simply not the case,” SMSF Association chief executive John Maroney warned.
“Trustees of a complying SMSF must make an election for CGT relief to apply in the approved form contained within the CGT schedule of their 2016/17 SMSF income tax return.
“The irrevocable election for CGT relief must be made on or before the day a trustee is required to lodge the fund’s 2016/17 income tax return, and for some trustees that is just weeks away, on 31 October 2017.”
According to Maroney, the industry body is most concerned about trustees who are not receiving specialist advice and as such might be completely unaware of the impending deadline among all of the other superannuation changes they potentially have to deal with.
“The fact is the tax return lodgment date for the 2016/17 financial year for SMSFs where one or more prior-year tax returns are outstanding at 30 June 2017 is 31 October 2017,” he said.
“If trustees of such SMSFs don’t make a CGT relief election by this date by lodging their SMSF return on time, they could miss out on CGT relief and potentially thousands of dollars in tax savings.”
He revealed sector feedback the association has received indicates there is still a great deal of confusion surrounding the changes to the superannuation system. To this end, he recommended trustees seek some specialised advice if they believed they were eligible for CGT relief but were unsure of their situation.