Act now to boost your super
10 March 2017
Five questions you need to ask yourself
After months of uncertainty and intense lobbying on the controversial aspects of the federal government’s superannuation reform, the amended superannuation legislation was finally passed in late November.
The superannuation changes present a profound adjustment to the strategic landscape for Self Managed Superannuation Funds (SMSFs). Like any change, they highlight the importance of good guidance from accountants and advisers.
Over the past few months, Julie Schofield from professional services firm Boyce Chartered Accountants has been asked many questions from her portfolio of clients and is implementing new strategies to ensure clients are in the best possible position prior to the changes coming into effect on 1 July 2017.
Below are five key areas that need to be looked at before 30 June 2017.
Have you accessed the $540,000 bring forward rule? Where individuals still have access to the three-year ‘bring forward’ concessions they could make an ‘in specie’ contribution of business real property, such as primary production land, into their SMSF up to the value of $540,000 a person or $1.08m a couple if under the age of 65 before 30 June 2017. After 30 June 2017 the non-concessional cap decreases or may not be available to some individuals.
Have you reached a condition of release? A condition of release is a term that means a member can take their super’ out of the super’ system after satisfying one of the many conditions. This is important as once a condition of release has been met superannuation balances become unrestricted non-preserved (URNP). Pension paid from an URNP balance will retain the tax exemption post 1 July 2017.
Does the CGT relief apply to you? The biggest misunderstanding is that everyone can get it and everyone should use it. Broadly, an SMSF trustee can elect to obtain CGT relief to reset the cost base of the asset to its market value under either the segregated or proportionate method; what method applies depends on the individual circumstances of the fund.
My super’ balance is over $1.6million. What does this mean to me? If the combined value of any pension accounts exceeds $1.6 million you will need to take action to move some of your super’ back to accumulation phase. Total superannuation balances in excess of $1.6 million will mean you can no longer make non concessional contributions to super’ after 1 July 2017.
How is your death benefit structured? Existing arrangements may not achieve the desired outcomes post 1 July 2017 so now is the perfect opportunity to review your estate planning with respect to superannuation.
Superannuation is complex and getting the right advice is imperative because errors with contributions and structuring land in SMSF’s can have huge negative consequences down the track.
Julie Schofield and Boyce Financial Services Pty Limited are Authorised Representatives of Lonsdale Financial Group Limited, ABN 76 006 637 225, AFS Licence No. 246934.
This information is of general nature only and is not intended as a personal advice. It does not take into account your personal circumstances. We recommend you consult a financial adviser before making any financial decisions.