With tax year end approaching fast, now is a good time to ensure you:
• MAKE THE BEST USE OF YOUR SMSF &
• COMPLY WITH ITS OBLIGATIONS
Timing of contributions payments
It is important to ensure that any contributions made to your Fund are made with sufficient time for any banks or clearing houses to process the payment prior to 30 June 2016.
It is also important to ensure that you do not exceed your contributions caps as it could potentially result in additional tax payable. The current contributions caps for the year ending 30 June 2016 are as follows:
|Under 49||Over 49|
|2015 – 16||$30,000||$35,000||$180,000|
The “bring-forward cap” still applies for those under 65 and remains at three times the non-concessional contributions cap of the first year in which the cap is triggered. If the cap was triggered after 1 July 2014 then the “bring forward” amount will be 3 x $180,000 = $540,000.
Contributions holding account (reserve)
If you are expecting to have significantly higher taxable income in the 2016 year, it is possible to bring forward a deduction for personal concessional superannuation contributions, “effectively claiming the deduction twice in one year”! Note by doing this you are using ‘next years’ contribution cap and will therefore be limiting your claim in the 2017 financial year.
Work test requirements for those over 65
Remember that if you are 65 or over, you must meet the ‘work test’ before making any contributions to your Fund. This means that you must work at least 40 hours in a 30 consecutive day period before you can make any contributions.
You can split up to 85% of your taxable contributions to your spouse as a means of boosting their superannuation. This may be a strategy where your spouse does not have much superannuation in their account, or where they are closer to their preservation age.
If you earn less than $35,454 for the 2015-16 tax year, and you make a non-concessional contribution of $1,000 to your superfund, you may be eligible for the government co-contribution of a maximum of $500. This amount will reduce proportionately as your income reaches $50,454.
If your spouse earns less than $10,800, you may be able to qualify for a $540 tax offset for contributions that you make on your spouse’s behalf. This could be a great way of increasing your spouse’s super, as well as decreasing your taxable income should you both be eligible.
Have you made contributions that you are not aware of?
Contributions also consist of more than just cash deposits to a Fund’s bank account. The following items could also count towards your contributions caps:
• Expense payments for your SMSF that you pay personally or that are paid for by a third party on your behalf
• Life insurance premiums paid by your employer to another Fund
• In-specie transfers of assets to your Fund.
From 1 July 2016, employers with 20 or more employees will be required to meet their superannuation obligations under the new SuperStream requirements. This requires all contributions data (not monies) to be sent electronically.
If you have any queries regarding the above matters or other superfund questions please do not hesitate calling myself, Andre Christian, Accredited Superfund Auditor or either of my partners:
• Jennifer Chen: Tax Partner or
• Richard Wakefield: Financial Planning Partner
• On (02) 9829 3111 For a free consultation