New financial year - what's new?

Event-based reporting

A significant new reporting regime for SMSFs commences from 1 July 2018.

From 1 July 2017, superannuation fund members have been subject to a $1.6 million transfer balance cap (TBC). The TBC is a limit on the total amount of superannuation that can be transferred into the retirement phase, which in turn limits the tax exemption on balances above this amount.

Any events that affect the value of your transfer balance cap need to be reported to the ATO.

By 1 July 2018, any pensions that were in existence on or before 30 June 2017 need to be reported. From 1 July 2018, any events that affect the value of your TBC – new pensions, some limited recourse borrowing arrangements, lump sum payments – need to be reported.

We will be in contact with you about how to manage the new requirements.

Carry forward unused concessional contributions

Where a member:

• Has a total superannuation balance below $500,000 as at 30 June, and

• Has not used their entire concessional contribution cap for the year ($25,000)

They now have the ability to ‘carry forward’ the unused contribution amount on a rolling 5-year basis. Unused cap amounts can be carried forward from the 2018-19 financial year (with 2019-20 the first opportunity to access these unused concessional contributions).

Encouraging the over 65s to downsize

From 1 July 2018, those over the age of 65 can contribute $300,000 from the proceeds of selling their home to superannuation. These contributions will be excluded from the existing age test, work test and the $1.6 million balance threshold (but will not be exempt from the $1.6m transfer balance cap).

Both members of a couple can take advantage of the concession for the same home. So, if you have joint ownership of the property and meet the other criteria, both people can contribute up to $300,000 ($600,000 per couple).

The measure will apply to sales of a principal residence owned for the past ten or more years and where the contract of sale is exchanged on or after 1 July 2018.

Sale proceeds contributed to superannuation under this measure will count towards the Age Pension assets test.

If you have any questions please don't hesitate to contact us