Now is the time to ensure your self-managed super fund strategies are in place for the end of the financial year.
1. Minimum pension payments due 30th
It is a requirement of the Superannuation Industry Act that you withdraw minimum pensions in order to meet your pension standards.
2. Value your SMSF assets by 30th
It is now mandatory to value assets annually, and the appropriate valuation method will depend specifically on the asset that is being valued.
3. Concessional contributions
$30,000 under 50, and $35,000 if you were over age 50 this year. Maximise contributions up to concessional contribution cap but do not exceed the concession limit. Check employer contributions on normal pay and bonuses, salary sacrifice and premiums for insurance in super, as they may be included in the limit.
4. Spouse contribution
Does your spouse have an assessable income plus reportable fringe benefits totalling less than $13,800? Consider making a spouse contribution.
If you earn more than $35,454, your co-contribution entitlement reduces by 3.33 cents for every dollar you earn over $35,454, until it cuts out at $50,454 (for the 2015/2016 year). For example, if you earn $40,000 and you make an after-tax contribution of $1,000, the Government's maximum contribution of $500 is reduced by $152, which potentially gives you a co-contribution of $348.
6. Payments made on behalf of the fund
Check for amounts that may be a superannuation contribution such as expenses paid for on behalf of the fund, debt forgiveness or in-specie contributions, and insurance premiums for cover via super paid from outside the fund.
7. Do you meet the work test if over 65?
To continue to make contributions to super, you must pass the work test of at least 40 hours in not more than 30 consecutive days during the financial year.
8. Notice of intent to claim a deduction
If you are planning to claim a tax deduction for personal concessional contributions, you must have a valid 'notice of intent to claim a tax deduction'. If you intend to start a pension, this notice must be made before the pension is commenced. Many trustees like to start the pension in June and avoid having to take a minimum pension but ensure you have claimed their tax deduction first.
9. Contributions splitting
Consider splitting contributions with your spouse, especially if one of the following applies:
o your family has one main income earner with a substantially higher balance
o if there is an age difference where you can get funds into pension phase earlier
o if you can improve eligibility for concession cards or pensions by retaining funds in superannuation in a younger spouse's name.
10. Review capital gains tax
Review any capital gains made during the year and over the term you have held the asset. Consider disposing of investments with unrealised losses to offset the gains made. If you are in pension phase, consider triggering some capital gains regularly to avoid building up an unrealised gain.
11. Review and update your investment strategy & insurance to members
Review your investment strategy and ensure all investments have been made in accordance with it, and the SMSF trust deed. Also, make sure the investment strategy has been updated to include consideration of insurances for members.
12. Double dipping…June contributions deductible this year but can be allocated across two years.
If you have a large taxable income this year (large bonus or property sale) and are expecting a lower taxable next year, consider a contribution allocation strategy to maximise deductions for the current financial year.
13. In-house assets
For in-house asset investments ensure that the market value of these investments is less than 5 per cent of the value of the fund. The new SMSF penalty powers will make it easier for the ATO to apply fines for smaller misdemeanours, so ensure you comply.
14. Check ownership of all SMSF investments
Ensure all assets of funds are held in the name of the trustees on behalf of the fund. Carefully check any online accounts that may have been set up without checking the exact ownership details. You have to ensure all SMSF assets are kept separate from your other assets.
15. Review estate planning.
Review binding death benefit nominations (BDBN) to ensure they are valid and still in accordance with your wishes. Do you know what your deed says on the subject?
16. Review any SMSF loans
Have you made all the payments on your internal or third party loans? Have you looked at options on prepaying interest or fixing the rates while low? Have you made sure all payments for limited recourse borrowing arrangements for the year were made through the SMSF trustee? If you bought a property using borrowing, has the holding trust been stamped by the state's Office of State Revenue?