The SMSF Association says 30 June is a ‘red alert’ for SMSF trustees, with several “critical issues” that need to be considered ahead of the “looming” deadline.
SMSF Association CEO John Maroney said the transitional CGT relief, Transfer Balance Account Reporting (TBAR) and contribution caps should all be on the radar in preparation for the end of the financial year.
“SMSF trustees need to be aware they may have to report a transfer balance cap income stream before 1 July 2018,” he said.
“If a member in retirement phase was receiving an income stream on 30 June 2017 that continued to be paid after that date, this income stream must be reported on the Transfer Balance Account Report (TBAR) form before 1 July 2018. “
Maroney noted that as 1 July falls on a weekend, SMSFs will have until Monday 2 July 2018 to make an election for transitional CGT relief.
“The CGT relief rules allow funds to reset the cost base of assets affected by the introduction of the transfer balance cap and changes to transition to retirement income streams. This is a valuable, one-off opportunity for SMSF members to minimise the impact of the changes on their retirement savings, and should not be overlooked,” Maroney said.
He also warned that this is the first financial year for which the lower concessional and non-concessional contribution caps have been in place, and that SMSF trustees should check they are within the contribution limits.
“However, it is also the first year where the ‘10% rule’ is removed for personal deductible contributions, meaning all individuals are able to contribute $25,000 in personal contributions and claim a deduction for them rather than only those who were self-employed,” he said.
“These end of financial year issues can be complex and we would encourage any SMSF trustees who are unsure of their entitlements and obligations to seek specialist SMSF advice immediately.”
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By Luke Smith
Sole Purpose Test
12 June 2018