End of Financial Year Checklist

As the end of financial year approaches, these are the key superannuation considerations your clients need to make prior to 30 June 2019:

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 eligible members
  • 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 2018, 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 2019. 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)

  • From 1 July 2018, you will need to determine which of you SMSF clients will fall into the quarterly or annual TBAR regime. Once the reporting timeframe is set, it will remain for the life of the fund
  • Ensure you are on top of your quarterly reporting for relevant clients. The ATO has acknowledged they will apply some leniency to TBAR this financial year, but will expect your clients are reporting on time from 1 July 2019.

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 1800 333 143 to discuss your specific requirements.