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Insight Super SMSF Blog

Last Minute End of Financial Year Tips

Clinton Ham - Tuesday, June 25, 2013

30 June is fast approaching but there is still time to take advantage of some end of year opportunities.

 

Following is a summary of items that SMSF trustees may wish to consider leading up to 30 June 2013:

1.  Make Concessional Contributions up to the $25,000 Cap

Concessional contributions are employer contributions (including salary sacrifice) and personal contributions claimed as a tax deduction by individuals who are fully self employed or who satisfy the 10% rule.  The maximum deduction that can be claimed is $25,000 this year for all individuals up to the age of 75.  Persons over age 65 need to satisfy a work test to be able to contribute to super.

But make sure not to exceed your cap as you may be hit with excess contributions tax.  Also if you are making a personal tax deductible contribution make sure the deduction will not exceed your expected taxable income for the financial year.

2.  Make Non Concessional Contributions up to the cap

Non Concessional Contributions are contributions made to the super fund for which you won't be claiming a tax deduction.  The non-concessional limit is $150,000 per person up to age 75.  If you are under age 65 you can take advantage of the bring-forward rule which allows you to make non-concessional contributions of up to $450,000 over a three year period.

3.  Take advantage of the government co-contribution

If you have earned under $31,920 this financial year you may be eligible for the super co-contribution.  The government matches 50 cents for every dollar of non-concessional contributions up to $1000 (resulting in a maximum co-contribution of $500).

If you earnings are between $31,920 and $46,920 you may be eligible for a co-contribution at a reduced rate.

4.  Obtain Valuations for your SMSF Assets

Compulsory market value reporting applies this year so if your SMSF invests in property, unlisted shares, units or artworks you may wish to obtain a market appraisal so they can be correctly valued in your 30 June 2013 financial statements.

Valuing assets for SMSF financial statements doesn't have to be conducted by a qualified valuer.  However it does need to be based upon objective and supportable data.

5.  Review Your Investment Strategy and Consider Life Insurance for Members

Now is a good opportunity to review your investment strategy and to consider life insurance for members.  From the 2012/2013 financial year:

  • Trustees of SMSFs are required to consider, as part of their investment strategy whether the fund should hold a contract of insurance that provides insurance cover for one or more members of the fund; and
  • Trustees are required to regularly review their investment strategy.  Previously it was only a requirement to formulate and give effect to an investment strategy.

We will shortly be writing to clients to ask if they require assistance with these changes.

6.  SMSFS with Members in Pension Phase

Members drawing a pension should ensure that they have withdrawn their required minimum pension amount by 30 June 2013.  Otherwise the investment income derived may lose its tax exempt status.

7.  Take Advantage of the Tax Offset for Spouse Contributions

Taxpayers are entitled to a maximum $540 tax offset for super contributions made on behalf of a low income or non working spouse.  The maximum rebate is based on 18% of a maximum $3000 non-concessional contribution.  The maximum rebate is reduced by $1 for each $1 that the total of the spouse's assessable income, reportable fringe benefits and reportable employer super contributions exceeds $10,800, cutting out completely at $13,800.

8.  Commence Compiling Documents for End of Year to Ensure Your Super Fund Audit Runs Smoothly

Now is also the time to start compiling documents ready to send to our office for preparation of your SMSF tax return and audit. 

 




The information on this website is intended for general information only, contains general advice and has been prepared based on the current taxation and superannuation laws. No person should rely on the contents of this website without first obtaining advice specific to their circumstances from a qualified professional.