Changes to super laws that resulted from the 2016 super reforms should be a trigger for SMSF trustees and their advisers to review the SMSF trust deed, according to a technical manager.
Wealthdigital technical manager Rob Lavery said the rules that govern super are going through a period of significant, segmented change.
While many SMSFs will be up to date with the changes, this might not necessarily be the case with all funds, highlighting the need to review trust deeds, Lavery said.
Contribution rules have changed considerably, including removal of fund-capped contributions and the impending implementation of a work test exemption, he noted.
“On July 1, 2017, non-concessional and concessional contribution caps were reduced. These reductions were paired with total superannuation balance testing to determine the amount that could be contributed,” he said.
“What made this transition easier was the removal of fund-capped contributions, taking the onus of determining if the member was eligible to make a contribution off the fund.
“No sooner had SMSFs adjusted to these significant changes than a new series of changes came into effect on July 1, 2018.”
These include downsizer contributions and eligible members being able to amass unused portions of concessional contributions caps to be used in future financial years.
New draft laws may also implement a 2018 budget proposal to allow an exemption to the work test to take effect from 1 July 2019.
“In their draft form, these laws look as though they will allow 65 to 74 year olds with superannuation balances of less than $300,000 one financial year in which they can make voluntary contributions to super provided they met the work test in the preceding year,” Lavery said.
In addition, eligible first home buyers can now withdraw voluntary contributions from super up to set limits to assist them in buying their first home.
“All SMSF trustees and their advisers should be actively reviewing the fund’s deed to ensure it reflects current laws and won’t prevent members from executing crucial strategies,” Lavery said.