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ATO, Superannuation

SMSF establishment balances jump

SMSF establishment balances have increased says the ATO

More SMSFs are being established around the $500,000 mark, meeting the Productivity Commission’s suggested benchmark made earlier this year.

The average level of assets in an SMSF at establishment passed the $500,000 mark during 2017, increasing by nearly 40 per cent on the previous year, according to new annual SMSF data released by the ATO.

The data, for the 2016/17 financial year, is the most recent annual overview of the SMSF sector collected from fund returns and registrations, and showed average asset balances per SMSF at establishment in 2017 were $521,373, compared with $379,136 in 2016,  representing an increase of 38 per cent.

The total increase over the five years of data released by the regulator indicated average assets per SMSF at establishment increased by 54 per cent from 2012/13 to 2016/17.

The ATO figures also reflected a similar change in average assets per member at establishment, increasing by 35 per cent from $196,000 in 2016 to $324,000 in 2017, and 57 per cent increase over the 2012 figure of $181,000.

While the regulator did not provide any commentary on the increases, the level of concessional contributions were reduced from $30,000 to $25,000 and non-concessional contributions were reduced from $180,000 to $100,000 from 1 July 2017.

In breaking down the asset ranges of SMSFs, the ATO found 16.7 per cent of funds had assets of less than $200,000 and 47.7 per cent of funds had assets between $200,000 and $1 million – accounting for 21 per cent of all SMSF holdingd.

A further 32.4 per cent of self-managed funds had balances between $1 million and $5 million while 3.3 per cent of funds had assets of $5 million or more but accounted for 24.6 per cent of total SMSF assets.

Further the ATO data revealed over the five years the statistics covered the benefit balances of SMSFs in their first year increased and of the funds established in 2012/13, 51 per cent held more than $200,000 in assets, a figure which had increased to 67 per cent for those established in 2016/17.

While the data reflected a decrease of 16 per cent in the proportion of SMSFs established with $200,000 or less in assets from 2012/13 to 2016/17 there was an increase of 12 per cent in the proportion of SMSFs established with assets of between $500,000 and $2 million in the same five-year period.

The $500,000 figure was flagged earlier this year by the Productivity Commission as a recommended level at which to start an SMSF to ensure it was cost effective for members.

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