Now and then, taxpayers may find themselves in a situation where they simply have no records to back up a tax claim. There can be many reasons for this, such as losing documents when moving home (either paper or electronic), or technology failures that end up with the same result (or at worst even destroy records).
The majority of people who set up their own SMSF say that “control” is a big reason for doing it. There is flexibility and benefits in running your own superannuation fund, but it is also a big responsibility to make sure your fund grows and provides for your retirement.
Preparing an “investment strategy” is one of the key tasks that SMSF trustees need to complete — and maintain. This involves formulating a strategy that takes into account risk, return and diversification. There is no master plan or prescribed format for preparing an investment strategy, and it will be largely determined by your own approach to investment and risk, and in fact will be unique to your SMSF.
From 1 October 2019, SMSFs that lodge their annual return two weeks after their lodgement due date (for example, 28 February or 15 May) will be suspended from receiving rollovers and employer contributions. The superfund status on the Super Fund Lookup System (SFLU) will change to ‘regulation details removed’. The status will be reinstated to ‘complying’ once all overdue lodgements are up to date.
The latest statistical report from APRA has been released, which of course mainly focuses on the APRA-regulated superannuation funds in the retail and industry sectors.
But the APRA statistics also make passing mention of ATO-regulated funds, the SMSF sector, which from June 2018 to June 2019 grew in total assets from $735.4 billion to $747.6 billion — an increase of $12.2 billion. For a bit of fun, you can think of that equalling roughly $33.4 million each day, $1.4 million each hour, or $23,200 every minute.
Since event-based reporting started for SMSFs from 1 July 2018, the ATO says that for the larger part, SMSF trustees have mostly adjusted to the new requirements.
Now that an entire income year under the transfer balance account report (TBAR) regime has been completed, some teething problems have emerged. A big one for the ATO has been the high number of commutation authorities that have been unnecessarily issued. The ATO says more than 50% of these were revoked due to it consequently receiving amended reporting.
Operating expenses that are incurred by an SMSF are mostly deductible, however there can be exceptions to the extent that these relate to the gaining of non-assessable income (such as exempt current pension income) or are capital in nature.
The income year of 2019-20 has just ticked over, which is also the first year in which an individual is able to make additional catch-up contributions to super through the application of unused concessional (before tax) contributions.
The Coalition Government has been re-elected in the 2019 Federal Election, so you may be relieved to hear that for at least the next three years we hope to have sustained stability for super. However, there are still some tweaks to the superannuation system which we anticipate will be implemented. With the end of the financial year fast-approaching, now is the time to ensure everything is in place for your SMSF before 30 June.
The federal election has been called for May 18 and both major parties have outlined their superannuation and tax policies. With the federal election only weeks away many of our clients have been asking what the major political parties’ policies are that may impact their SMSF, individual taxation circumstances or personal investments.
Under the superannuation downsizer scheme, people aged 65 and older can make a non-concessional (post-tax) contribution of up to $300,000 from the proceeds of selling what was once their family home. Downsizing enables more effective use of housing stock, and existing contribution caps and restrictions will not apply to the downsizer contribution. The scheme applies from 1 July 2018.
The Treasurer Josh Frydenberg’s first budget has lots of goodies with few “baddies”. This was to be expected with the next federal election only weeks away and the Coalition Government trying to make up ground in the polls.
A major change in the way employers report the tax and super information for their employees to the ATO has been on the way for a while now. The single touch payroll (STP) system started to be rolled out gradually from 1 July 2018 for what the ATO refers to as “substantial” employers (those with 20 or more staff). Recently passed legislation extends STP to all employers, regardless of the number of staff, from 1 July this year.
The same business test to be replaced by a “similar business” test
Removing tax deductibility of ‘non-compliant’ payments
The new “consumer” rules for GST and online purchases
Rental travel expenses mostly off the table
When valuations of property are important for tax