2018 EOFY Checklist

As the end of financial year approaches, these are the key superannuation considerations your clients need to make prior to 30 June 2018:

Pensions

  • Ensure minimum pension paid otherwise pension will cease and fund will lose its tax exemption on earnings
  • For clients with a TRIS check maximum pension not exceeded

Concessional (Tax Deductible) Contributions

  • Pay balance of year’s contribution. Internet transactions on 30 June may not appear in bank accounts until 1 July.
  • Remember – maximum contribution is $25,000 for all members with the transitional caps removed from 1 July 2017
  • If the fund member is in the 65-74 age group, ensure work test has been met prior to making contributions.
  • Lodge splitting notices with super fund trustee
  • Everyone who is eligible to contribute will be able to claim a tax deduction for personal superannuation contributions without needing to satisfy the 10% rule – members should seek advice on whether this could benefit

Non-Concessional (Non-tax deductible) contributions

  • Make payments to super fund by 30 June
  • For members who had in a total superannuation balance of $1.6M or more at 30 June 2017, they will not be permitted to make a non-concessional contribution to super for the 2017/18 financial year
  • For members who had a total superannuation balance between $1.4M and $1.6M, should seek advice as to how much non-concessional they can contribute, as they will be restricted to either $100,000 or $200,000 (if eligible)
  • This fiscal year the maximum personal non-tax deductible contribution is $100,000, however, if members are under 65 years of age (if eligible) they could contribute up to $300,000 prior to 30 June 2017. Members should seek advice if they triggered the bring forward rule in the previous two financial years, as with the reduction in the non-concessional limit, they may not be able to contribute or be restricted to a lower amount

Transfer Balance Account Reporting (TBAR)

  • You will be required to conduct TBAR by 30 June 2018, for members who had retirement income streams at 30 June 2017, that carried over into the 2017/18 financial year
  • From 1 July 2018, you will need to determine which of you SMSF clients will fall into the quarterly or annual TBAR regime

Collectables

  • Either have these removed from the fund or ensure rules are complied with
  • Collectables can be sold to members but sale must be at market value
  • If the collectables are to remain in the fund, arrange insurance in the name of the SMSF trustee and have them removed from display at the member’s home or work premises.

Property valuations

  • Sworn valuations are not required for property held by SMSFs. Please be aware trustees are required to value assets at 30 June every year and the ATO valuation guidelines have not changed. You can view the guidelines here.

Related Party LRBA Loan

  • Ensure related party loans are based on commercial options or loans are amended to comply with safe harbour benchmarks in PCG 2016/5

Leases of property or equipment to associated parties

  • Ensure expired leases have been replaced
  • Make payment of any outstanding lease amounts

Loans to associated entities

  • Make certain loan is documented
  • Pay interest as required by loan
  • Reduce loan balance if needed to ensure compliance with in-house asset rules

SMSF fund expenses

  • For SMSF members in the accumulation phase, tax deductions for expenses are usually not significant, but it’s important to ensure expenses are actually incurred or paid before 30 June to be deductible in the current financial year.

How can we help?

If you have any questions, require assistance or would like further clarification on any aspect of your clients’ end of year superannuation tax planning, contact John Lethbridge today on 03 8508 7800 to discuss your specific requirements.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.