5 self-managed super fund tax time essentials to be aware of

With the end of year fast approaching, self-managed super fund (SMSF) holders should ensure they are familiar with all existing and new reporting requirements before the 30 June deadline.

There are a number of significant changes and key areas of focus for the 2014-15 and 2015-16 financial years, impacting both current workers and retirees.

Those managing their own super funds need to ensure they understand both their concessional and non-concessional contributions caps and how these will impact on their end of year tax assessments.

Not keeping up with recent changes to self-managed super funds will be no excuse come tax time, and individuals who are not across every aspect of their Fund obligations will risk being caught out.

Government Age Pension recipients

Rules around the Age Pension income test changed from 1 January 2015, and any changes made to a pension from your SMSF could affect how your Government Aged Pension is calculated.

It is important that you let your advisor know if you are in receipt of the Aged Pension.

Investment valuations

When reporting investments, SMSF holders should note that new rules for artworks and collectables will come into effect from 1 July 2016.

From this date, any artworks or collectables transferred out of a Fund will need to be valued by an independent qualified valuer.

Be aware that this rule applies regardless of the purchase date.

SuperStream

From 1 July 2015, employers with 20 or more employees will be required to meet their superannuation obligations under the new SuperStream requirements.

This will require employers to send super contributions data (not monies) electronically, including to SMSFs, so you may need to confirm the details around this with your employer.

Non-concessional contributions

The non-concessional contribution caps for both FY15 and FY16 are $180,000 annually.

The bring-forward cap still applies for those under 65 at 1 July, and remains at three times the non-concessional contributions cap of the first year in which the cap is triggered. If you brought forward your contributions in 2013 or 2014, it would be 3 x $150,000 = $450,000. However, if the cap was triggered after 1 July 2014 then the bring-forward amount would be 3 x $180,000 = $540,000.

The ATO has recently confirmed that any excess non-concessional contributions can now also be refunded to a member. Any associated earnings on the excess, as calculated by the ATO, would be taxed at the member’s marginal tax rates, and these rules apply retrospectively from 1 July 2013.

Related party loans

The ATO has recently indicated that income earned from an arrangement involving a loan from a related party which is not maintained at arm’s length, is at risk of being subject to the non-arm’s length income rules.

This is a significant area to be aware of as such income would be taxed at 47 per cent.

There are a number of other factors that the ATO will also look at in relation to related party loans, so those concerned should raise this with their advisor.

By BDO Superannuation Partner Paul Rafton