The regulator has underscored three key areas for SMSFs to review and assess well before the end of 2017.
“As the year comes to a close there are key practical considerations and points for SMSFs, and super funds more broadly, to consider in the coming weeks and months,” ATO SMSF segment assistant commissioner Kasey Macfarlane told selfmanagedsuper.
The first reminder is in relation to the transfer balance cap (TBC) relief.
“For those who have exceeded the TBC by $100,000 or less, that relief ends on 31 December, so those who may have exceeded the cap by a small amount have just a couple of weeks left to take action and fix it before becoming subject to any additional tax or penalties,” Macfarlane said.
“In January 2018, it is correct that the ATO will be starting to issue excess TBC determinations, but particularly for the SMSF sector it’s important to emphasise and highlight that the ATO can only issue those determinations based on the information that’s been reported to us.
“The majority of SMSFs won’t have started reporting to us for TBC purposes yet so the message for SMSFs is that just because you don’t receive one of these notices or you don’t hear from us doesn’t mean everything’s okay in regards to their TBC because, again, it is premised upon the information that’s reported to us.”
Another area Macfarlane wanted to underline for SMSFs was the transitional capital gains tax (CGT) relief.
“Our key message is don’t leave it to the last minute – people have until the due date of their fund’s annual return lodgement to elect to use the transitional relief if they qualify, but I want to emphasise that it shouldn’t be left to the day before and thought of as just ticking the box,” she warned.
“There are a number of considerations and calculations to be undertaken and, of course, ensuring relevant valuations are in place before you even get to that point.”
Finally, those SMSFs using the ATO’s practical approach for pre-1 July 2017 commutations need to ensure the amount of the commutations is determined now, she said.
“The amount of those commutations must be reflected in the SMSF’s 2016/17 financial statements and reported in the SMSF’s annual return,” she noted.
