Contributions – getting money into your fund
If you are intending to make contributions into your SMSF, you need to make sure contributions are received by your SMSF on or before 30 June 2016 in order for it to be counted in the 2016FY.
Check your timing – this year 30th June falls on a Thursday, we recommend making any contributions on or before Tuesday 28th of June.
Concessional contributions – the concessional contribution caps for the 2016 financial year are as follows:
- If you are 50 or over – $35,000.00
- If you are under 50 – $30,000.00
Concessional contributions can either be made by your employer or yourself personally. If you are salary sacrificing, please review your year to date contributions and take into account any additional contributions that may be made.
Claiming a tax deduction if you are self-employed – if you are self-employed and aged under 75, you are generally eligible to claim a tax deduction for personal superannuation contributions. You will need to lodge a ‘Notice of intention to claim a tax deduction’ with your SMSF trustee before you lodge your personal income tax return. Babbage & Co. can prepare your notice of intent to claim form.
The maximum amount of deduction you can claim is limited to your assessable income.
Non-concessional contributions – the Federal Budget, released in May of 2016, announced that Parliament intends to introduce a $500,000.00 lifetime cap on non-concessional contributions. All contributions made on or after 1 July 2007 will count towards this cap. Contributions made before 1 July 2007 cannot result in an excess.
Pre-Budget – $180,000.00 per year or 3 year bring forward rule $540,000.00
Spouse contributions – presently, individuals are entitled to an offset of up to $540.00 for superannuation contributions made on behalf of their spouse. The maximum offset is available for $3,000.00 in contributions or more. In the May 2016 Federal Budget, the government announced that the eligibility threshold for the spouse’s income will increase from $10,800.00 to $37,000.00.
Over age 65? You need to meet the work test – if you are aged over 65, you need to meet the work test at the time of making contributions to your SMSF. The work test is paid employment of 40 hours in a 30 day period.
If you are accessing an account based pension from your SMSF, then you need to make sure that the minimum amount required to be paid under the superannuation law is paid from your SMSF by 30 June 2016.
Please keep in mind that if you are on a Transition to Retirement Pension that you have a 10 per cent maximum allowance for your pension.
All SMSF assets are required to be valued at market value. This means that leading up to 30 June, if your SMSF has an interest in/owns unlisted and/or uncommon assets such as commercial property, shares in unlisted companies and any other unusual assets you should start thinking about obtaining valuation information for these investments.
Firstly, the mandatory disclaimer:
The information contained in this article is general in nature and is not intended to serve as advice. No warranty is given in relation to the accuracy or reliability of any information. Readers should not act or fail to act on the basis of information contained herein. Readers are encouraged to contact the sender to request personalised advice for specific matters before making any decision.
As an SMSF trustee you should review your investment strategy and ensure all investments have been made in accordance with it, and the SMSF trust deed. Also, make sure your investment strategy has been updated to include consideration of insurances for members.
Review any realised capital gains made during the year from assets that have been sold at a profit and consider disposing of investments with unrealised losses to offset the gains made. This strategy is especially valuable for SMSFs where the members are in accumulation phase. If in pension phase then consider triggering some capital gains regularly to avoid building up an unrealised gain that may be at risk to government changes in legislation like those proposed this year.
Please speak to your investment adviser regarding any possible trades or transactions prior to 30 June.
If you have any questions on any of the above items please contact us.
PH: (03) 9819 1988 Email: email@example.com
Babbage & Co. Team