Self-Managed Super Funds (SMSFs) are subject to an audit every year, so for SMSF trustees this can be a very busy period.
There are plenty of rules and regulations around the management of an SMSF and it’s important you discuss your personal financial circumstances with your accountant or financial adviser.
We’ve provided a general checklist below on some of the key things to check over before 30 June.
Maximising Super Contributions
It can be tax-effective to contribute up to the maximum cap for each of your SMSF members.
There are two types of contributions: concessional and non-concessional.
You have a maximum concessional (pre-tax) contribution of $25,000 this financial year. These include all your employer’s Super Guarantee contributions and salary sacrifice. And if you haven’t reached the maximum $25,000 and decide to make a personal super contribution, you can claim a tax deduction in your personal tax-return and this amount will be calculated towards this $25,000. Just make sure you submit the form ‘Notice of intent to claim or vary a deduction for personal super contributions’ to your super fund and have it acknowledged in time.
The maximum non-concessional (after-tax) contribution is $100,000 this financial year. You can make up to three years’ worth of these contributions (total $300,000) in a single year but special rules do apply, particularly if your super account balances total over certain levels.
Remember if you are aged between 65 and 74 at the time of the contribution, you will also need to satisfy the work test requirement of 40 hours minimum in a 30-day period.
Check your contributions to ensure you haven’t gone over the cap, otherwise you could be up for a hefty tax bill.
For your contribution to be counted for the 2018-19 financial year, the trustee of your super fund needs to have received the contribution before 30 June 2019.
The key date is not when you make the payment but when it is received by the trustee of your super fund. This year, 30 June falls on a Sunday so make sure you submit your payment by 24 June at the very latest. Don’t rely on instant payment systems as many electronic fund transfers and BPay can still take several days to reach the recipient’s account..
Minimum Pension Payouts
If you have a pension member in your fund, make sure the required minimum pension has been paid. SMSF trustees need to make sure there’s always enough cash available to meet future expenses as pension payments can only be paid in cash and not as a transfer of asset.
The table below shows the annual minimum pension payments as a percentage of the super account balance.
|Age||% of account balance||Age||% of account balance|
|75–79||6%||95 or more||14%|
From 1 July 2018, the downsize contribution allows those who qualify to contribute up to $300,000 from the sale of your family home, into your super fund.
To be eligible you must be at least 65 years old at the time of the contribution, have owned the home for a minimum of 10 years and exchanged contracts for the sale of the home on or after 1 July 2018. Contributions must also be made within 90 days of settlement.
Transfer Balance Cap & Total Super Balance
These are two restrictions that you need to comply with from 1 July 2017.
The Transfer Balance Cap is the total amount that can be transferred into your ‘retirement phase’ over the course of an individual’s lifetime. This amount is set at $1.6 million.
The Total Super Balance is the complete balance of your super fund including both the accumulation and retirement phases. The cap on this is also set at $1.6 million.
Record keeping for annual audits
As a trustee, you should take note of all investment transactions and decisions including why a particular investment was chosen and whether all trustees agreed with the decisions. This is important as if one of the SMSF investments fail, the other trustees can potentially take action against you for failing to be diligent, unless you have signed paperwork from them showing they agreed to your actions.
As a trustee of an SMSF, one of your main responsibilities is to keep proper and accurate tax and super records. There can be severe penalties for failing to comply with the rules and regulations of SMSFs. Check with your SMSF Specialist adviser or fund accountant if you are at all unsure.
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Disclaimer: This post has been prepared for general information purposes only. It is not specific advice to any particular person. You should consult an authorised Align Financial adviser before making financial decisions. Align Financial | Financial Planner Northern Beaches | Servicing North Narrabeen, Narrabeen, Mona Vale, Elanora Heights, Newport, Avalon, Palm Beach | Enquire with us online