Super strategies for your SMSF
Wednesday 24 January 2024 at 11:00 am AEDT
Are you making the most of having an SMSF? In this webinar we will cover strategies only available to SMSFs, including access to certain investments, effective tax and estate planning, as well as the benefits of investing as a couple or family.
Q. My self-managed super fund has held a property over 10 years. It continues receiving rent.
If I sell out the property, is there any extra capital gain tax discount for long-term holding other than the 33.33% discount for assets held longer than 12 months?
A: The capital gains tax discount for super funds is 1/3 for holdings of over 12 months. There is no additional discount for longer term holdings.
However, if the property is sold while in retirement (pension) phase, there is no tax on the capital gain as investment earnings are tax-free in retirement phase.
Learn more about the tax-free retirement phase and how it operates in SMSFs in the article linked below.
If you lodge your annual tax returns yourself, you need to appoint an auditor 45 days prior to the lodgement due date of 28 February, which is 14 January. If your fund has just started paying a pension, and there are members still in accumulation phase in the fund, you will also need an actuarial certificate with your annual return. A good time to start organising this certificate, to ensure it’s ready with your annual return, is at the same time you appoint your auditor.
Your fund will continue to need an actuarial certificate each year you have members in both retirement and accumulation phase if you are using the proportionate method to calculate exempt current pension income (ECPI) for tax purposes. As earnings on pension assets are tax free, ECPI is the proportion of the SMSF’s income that is tax free.
From 1 July 2022 there have been some changes to the way ECPI is calculated.. The ATO provides more information here.
Where any transfer balance event occurred between 1 October 2023 and 31 December 2023, you are required to report these events by lodging a transfer balance account report (TBAR) by this date.
These events include the start of a retirement phase income stream, ending a retirement phase income stream (reverting part or all of the pension to accumulation phase), or where a lump sum has been accessed from retirement phase.
Other events may be relevant for other members.
Read more about the transfer balance account reporting requirements for SMSFs.
Also note that SMSF trustees should have received all relevant super guarantee contributions for the period 1 October 2023 to 31 December 2023 for eligible fund members by this date.
If you’ve only had one trustee meeting this financial year, now is a good time to have another and to get into the practice of having at least six-monthly documented reviews of your SMSF.
It’s time to take stock of how the fund is performing and review your investment strategy. Also, consider reviewing the insurance needs of members. They may have experienced life events that could prompt a reconsideration of their life and TPD insurance in the SMSF.
If you didn’t do it earlier in the financial year, review your trust deed. It’s something that could do with at least an annual once-over as well. There may have been changes in legislation that could affect your deed. Perhaps you plan to take advantage of the new six-member rule to add more family members to your SMSF.
Or maybe you are looking at making a new type of investment that will require your trust deed to be updated. Are you considering purchasing a property in your SMSF at some point, for example, and does your trust deed permit this? And if you are considering cryptocurrency you may need to update your trust deed and your investment strategy.
Also, if a member is about to start a retirement phase pension your trust deed needs to allow the payment of the requested type of income stream.
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Important: All information on SuperGuide is general in nature only and does not take into account your personal objectives, financial situation or needs. You should consider whether any information on SuperGuide is appropriate to you before acting on it. If SuperGuide refers to a financial product you should obtain the relevant product disclosure statement (PDS) or seek personal financial advice before making any investment decisions.