CGT Top Of Adviser Minds

Capital gains tax is the fastest growing adviser query ahead of the 1 July changes to superannuation, according to the BT Advice Technical team.

BT technical consultant Tim Howard said during the March quarter advisers were most keen to identify how CGT relief will be applied to retail super and SMSF clients. This was followed by pre and post-tax super contributions, and the work test rules.

Howard explained CGT relief measures as special one-off tax concessions available to certain super fund members who may be adversely affected in two ways: by complying with the $1.6 million transfer balance cap, or changes to the tax treatment of transition to retirement (TTR) pensions.

It's important to keep in mind CGT relief is not automatic and the client must choose, where eligible, the investments on which to apply the relief, Howard said.

"Advisers are looking to get the best possible outcome ahead of 30 June and are proactively engaging with product providers and administrators to make this happen.

"For SMSF clients in particular, we're seeing a trend to collaboration between advisers, accountants and administrators to ensure no one misses the opportunity to apply CGT relief."

Regarding contributions, Howard warned: "This is the last opportunity for clients to make both higher concessional and non-concessional contributions under the current arrangements before 1 July.

Given the maximum amount that can potentially be contributed by a couple is $1.08 million after tax, the non-concessional contributions space is definitely where we're seeing the most interest and activity."

Advisers are also seeking clarification around the work test for their clients seeking to contribute to super.

For clients aged between 65 and74 wanting to make a contribution in the next year will need to satisfy the work test rules.

"Although previously proposed to be removed, the work test is here to stay which means from age 65 clients who are wanting to contribute to super will need to work at least 40 hours in any 30-day period in the financial year prior to making a contribution," Howard said.

Recent Posts

See All

ASIC Should Withdraw Its SMSF Factsheet

The Australian Securities and Investments Commission (ASIC) should withdraw its Self-Managed Superannuation Fund (SMSF) factsheet because it contains “an array of seemingly deliberate inaccuracies”, a

SMSFA Points To ASIC Fact Sheet Inconsistencies

The SMSF Association has criticised the corporate regulator’s focus on the risks of SMSFs in its mailout campaign targeting new trustees, saying the data sources used in its fact sheet are inconsisten