With the end of the financial year fast approaching it is time to look at some tax planning for your Self Managed Superannuation Fund. The following list provides some ideas, issues, and strategies that can be used (or need to be addressed) with your self-managed super fund before the end of the financial year:
- Ensure that you review your concessional contributions paid during the financial year to ensure that you don’t get caught with Excess Contributions Tax (ECT). If you put in more than the allowable cap, you will pay the top marginal tax rate of 46.5%.
- Remember that a member aged 49 and over 30 June 2014 can take advantage of the additional temporary cap – this allows up to $35,000 of concessional contributions for the 2014/15 income year.
- It is important to continually maintain the accuracy of a member’s non-concessional contribution position, in particular where the bring-forward rule has been applied. Don’t end up paying a 93% tax with excessive concessional contributions.
- Spouse contributions can provide the person making the contribution (on behalf of their spouse) to be entitled to a tax offset of up to $540.
- Remember to include when calculating concessional and non-concessional contributions expenses paid personally on behalf of the fund – these amounts count towards the contribution caps!!
- Make an after-tax contribution into super to qualify for the government co-contribution. If your income for the financial year is below $49,488, you’ll receive a benefit up to $500.
- With a growing number of SMSF members moving towards income streams, have you considered how to best structure any pensions? Thinking about tax efficiency today, along with the longer term estate planning benefits are all important considerations in the structuring of retirement income streams.
- Ensure that you have met your minimum pension payments for the financial year. By not meeting the minimum pension will mean that the fund will not receive the 0% tax rate on income generated by assets supporting the pension.
- Obtain valuations for assets such as property, artwork, collectibles and other fund assets that should be valued to their market value at 30 June.
- Ensure that any existing death benefit nominations remain valid. In light of a some recent court decisions around the payment of death benefits, it comes as a timely reminder for members to review their existing SMSF death benefit nominations.
Kyla Dalton – Accountant