SMSF: Managing your superannuation fund for 2017 financial year and beyond

It’s time for self-managed superannuation fund (SMSF) trustees to get ready for the end of this financial year and to look forward into next financial year.

There are both potential traps to be avoided and new opportunities to be exploited, so here’s how to prepare for both.

Before June 30, 2017:

• Make your concessional contributions before June 30 – it’s your last chance for the $35,000 cap depending on your age and work status
• Make your non-concessional contributions before June 30. If your super balance is over $1.6 million this is your last chance!
• Ensure you have drawn your minimum pension amount for the year and not exceeded your 10% if receiving a Transition to Retirement Income Stream (TRIS)
• Consider the allocation of contributions and pensions across members, keeping in mind the new $1.6 million transfer balance cap. If you are under 60 years of age do you have other income that has a bearing on your pension strategy?

After July 1, 2017:

• Gather all the information needed to prepare your super fund 2017 financial statements
• If you are in pension phase ensure all fund assets are revalued at market value, including property. Make sure you obtain a real estate agent’s appraisal to meet the rules
• Beware of the reduction in the concessional contributions cap. If you are contributing more than $25,000 in employer and pre-tax contributions you will need to make adjustments to your salary sacrifice arrangements
• Remember, if you are already over the $1.6 million transfer balance cap in your accumulation phase, you can no longer make non-concessional contributions
• If your member balance is greater than $1.6 million you will no longer be able to consider fund expenses that you personally pay as being in-specie contributions. They will need to be reimbursed
• If your partner’s income is less than $40,000 you may now be eligible for the spouse contribution tax offset of up to $540. The contribution needs to be made to his or her superannuation fund, and limits apply
• Review your transition to retirement income stream. Is it still appropriate with the removal of the tax exemption?
• Everyone earning more than $250,000 needs to be aware that the threshold for Division 293 tax on concessional contributions has dropped from $300,000
• Even if you are not self-employed, but are eligible to contribute to superannuation, you will now be able to make a personal super contribution and claim a tax deduction for it. Just ensure your total employer and personal concessional contributions do not exceed a total of $25,000 or excess contributions tax may be payable.

Need help navigating the changes?

This is a bumper year for superannuation changes. Some are positive while others are challenging and, in many cases, the impacts depend very much on individual circumstances.

If you need help navigating the changes, talk to the experts. Give us a call on (03) 9875 2900 or contact us via the form below.