SMSF Tax and YE TIPS

Published 14/06/2014

SMSF Tax and Year End Planning Tips for FY2014

As the year end is getting close, it is essential you get your year end planning done right!
We provide some useful tips for your SMSF tax and year end planning.

1. Review Concessional Contributions

Maximise contributions up to concessional contribution cap ($35,000 for those aged 59 years or over on 30 June 2013, $25,000 for others). Ensure you do not breach the caps and trigger excess concessional contribution charge. For members over 65, you must meet the work test rule to make contributions.

2. Review Non-Concessional Contributions

Maximise Non-Concessional contribution cap up to $150,000. Non-concessional contributions are sourced from your after-tax income, which means the full contribution reaches your superannuation account, and no tax is deducted when the contribution reaches your fund. No tax is deducted from a non-concessional contribution because you haven’t claimed a tax deduction, or received any other type of tax concession, before making these contributions.

3. Review Bring-Forward-Rule

If you are under the age of 65, you can bring forward up to two years’ worth of non-concessional contributions, which means you can make up to $450,000 in super contributions in one year, representing your non-concessional (after-tax) cap over a three-year period.

4. Minimum pension payment

If you are in pension phase, ensure the minimum pension has been withdrawn. For transition to retirement pensions, ensure you have not withdrawn more than 10% of your opening account balance this financial year.
The following table shows the minimum percentage factor for each age group.

Age

Minimum % Withdrawal

Under 65

4%

65-74

5%

75-79

6%

80-84

7%

85-89

9%

90-94

11%

95 or more

14%

5. Government Co-Contribution

Check your eligibility for the government co-contribution and take advantage if eligible. You receive a tax free super contribution from the Federal Government when you make a non-concessional(after-tax) contribution to your super account, subject to you satisfying a work test, an income and an age test. 

For your eligibility, click on below link which will direct you to ATO’s Super co-contribution calculator.

ATO Co-contribution calculator

6. Work Test for members over 65

If you have reached age 65, you should review your eligibility to make super contributions by ensuring you have met the work test. The work test means you must be gainfully employed for 40 hours over 30 days. The 30 days can be any 30 consecutive days within the financial year. It’s a minimum requirement. There are no maximum limits to how much you can work. Gainful employment means you are employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment. 

7. Notice of Intent to Claim a Deduction

If you are planning on claiming a tax deduction for personal concessional contributions you must have a valid ‘notice of intent to claim a tax deduction’. If you intend to start a pension this notice must be made before you commence the pension.

Click on below link for a copy of this ATO form.

ATO FORM

8. Review and Update Investment Strategy

Ensure you have reviewed your investment strategy. Also, make sure your investment strategy has been updated to include consideration of insurances for members.

If you have any SMSF questions, please call SuperHelp on 1300 736 453.

Article Disclaimer: This information should not be considered personal financial advice as it is intended to provide general advice only. The article has been prepared by Superhelp Australia Pty Ltd without taking into account your personal objectives, financial situations or needs. 

The information contained in the article may not be appropriate to your individual needs therefore you should seek personal financial advice before making any financial or investment decisions.