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Contributions, Tax

Contributions a main EOFY concern

superannuation contributions financial year

Financial advisers are seeking information about making personal and downsizer contributions at the end of the financial year, according to BT.

Rules regarding contributions into superannuation, and specifically for SMSFs, is the leading area where financial advisers have been seeking information in the June quarter so far, according to the BT technical services team.

BT Technical Services technical consultant Tim Howard said the team receives more than 2000 questions every quarter and the most popular questions raised by advisers in the lead up to the end of the financial year are in relation to seeking more information on superannuation and downsizer contributions, as well as pension payments.

The company noted that while downsizer and personal contributions were of interest, advisers were also keen to understand the duties of SMSF trustees in accepting personal contributions into super.

“SMSF clients may need to be reminded of their obligations as trustees in relation to accepting personal super contributions from members,” it stated.

“A trustee must acknowledge the receipt from a member of their notice of intent to claim a deduction to ensure the tax deduction for the contribution is processed correctly.”

In regards to personal contributions into super, it noted advisers should be aware of the cut-off dates for transactions to be reflected in year-end statements as some may occur well before 30 June.

Additionally, super fund members should also be reminded they must submit a notice of intent to claim a tax deduction for the amount of any personal contribution with the trustee of their fund, and receive acknowledgement the notice has been accepted before lodging their income tax return.

Howard said the lowering of the age to be eligible to make downsizer contributions from 65 to 60 in the new financial year provided more opportunities for advisers to engage with clients.

“Despite signs of a slowdown, property is still changing hands at a relatively high rate in Australian cities and some clients who have been contemplating downsizing will proceed with their plans to sell the family home,” he said.

“Notably, if your client is about to turn 60, it’s worth checking if they are eligible, bearing in mind that generally from the date of settlement of the property sale, the client has 90 days in which to make the downsizer contribution.”

BT also pointed out the 50 per cent reduction in minimum pension payment amounts was still in place for another year after being extended to 30 June 2023 in the most recent budget.

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