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Property, Tax

Downsizer contributions get separate SAR treatment

downsizer contributions; annual return

The 2019 SMSF annual return will contain a separate area for trustees to inform the ATO about downsizer contributions that have been made.

SMSF trustees who have made use of the rules allowing downsizer contributions will have to complete a specific and separate label on the fund’s 2019 annual return.

The reporting of a downsizer contribution will fall under Section F of the annual return, with trustees having to complete fields H and H1 contained under the sub-heading “Contributions” on the form.

The information requested is the amount of the downsizer contribution defined as “Proceeds from primary residence disposal” and the date on which the contribution was received.

Downsizer contributions were able to be made from 1 July 2018 and apply to individuals aged 65 and over who sold their family home after this date. The maximum amount that can be allocated to an SMSF is $300,000 and the fund member need not satisfy any other voluntary contribution criteria, such as a total super balance cap restriction, age (apart from turning 65) or a work test, in order to make this type of contribution.

The downsizer and First Home Super Saver Scheme legislation were passed in December 2017.

In addition, SMSFs owning cryptocurrencies will now have to report these assets separately on the annual return.

This reporting will be required under Section H – Assets and Liabilities of the annual return in line 15c “Other investments”.

These areas are two of four new reporting requirements in the 2019 SMSF annual return, which also includes additional information about the fund audit and data regarding any existing limited recourse borrowing arrangements.

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