The end of the financial year is approaching. There have been significant changes to superannuation in the past two years. Here are key superannuation considerations that need to be made prior to 30 June 2018.
Ensure the minimum pension requirements are paid. If the minimum payment is not met, the pension will cease and the fund will lose its tax exemption on earnings.
Transition to retirement pension payments need to fall within the minimum and maximum amount. This information is provided to you annually with your compliance work. As the tax exemption on investment earnings have been removed, consideration needs to be given as to whether the TRIP continues.
Concessional (Tax Deductible) Contributions
The maximum concessional contribution cap for the 2018 financial year is $25,000. This applies to all members as transitional caps have been removed.
Fund members between the age of 65 – 74 need to pass the work test in order to make member concessional contributions.
The removal of the 10% rule means that if eligible, everyone is able to claim a deduction for personal contributions
Individuals with a superannuation balance less than $500,000 will be allowed to make additional catch-up concessional contributions where they have not reached their concessional contributions cap in previous years, with effect from 1 July 2018. Amounts are carried forward on a rolling basis for a period of five consecutive years, and only unused amounts accrued from 1 July 2017 can be carried forward.
Non-Concessional (Non-tax deductible) contributions
The maximum member non-contribution is $100,000. Members can bring forward three years' worth of contributions if under the age of 65. This means that up to $300,000 can be contributed in one year.
Members are not permitted to make non-concessional contributions if their total superannuation balance exceeds $1.6M at 30 June 2017.
Funds are required to value property assets at the end of each financial year. Asset valuations are a key component in preparing accurate financial reports. Depending on the situation, a valuation maybe undertaken by a registered valuer or a person without formal qualifications but who has specific experience or knowledge in a particular area.
Contributors - Emma McNaught and Tyson Arentz (Authorised representatives of the SMSF Expert)