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01 Apr 2021 Superannuation

SMSF trustees: Division 7A can provide relief for LRBA repayments

The ATO has updated their COVID-19 repayment relief guidance for SMSF trustees who have a limited recourse borrowing arrangement (LRBA) which also meets Division 7A requirements.

The new guidance is here to help SMSF trustees determine how to avoid the application of non-arm’s length income (NALI) rules, especially if unpaid interest has not been capitalised on the loan during the payment deferral period. 

More information can be found here.

Changes for tax professionals with SMSF clients

The ATO has released guidance on SMSF auditor independence standards for tax professionals with SMSF clients. The guidance can assist tax professionals and SMSF auditors assess whether their current arrangements comply with the independence standards. It also highlights issues practices need to be aware of when restructuring their arrangements.

Tax professionals who provide both audit services and non-assurance services such as accounting services in-house, will now need to review their arrangements.

To assist with the transition from in-house audits to fully complying audits under the Code, the ATO will not enforce compliance until 1 July 2021.

More information can be found here.

CRT Alert 005/2021 Reuniting More Super – Eligible Rollover Funds and Trustee Voluntary Payments

The Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020 (Act No. 24 of 2021), that facilitates the closure of Eligible Rollover Funds (ERF) and allows super providers to make Trustee Voluntary Payments (TVPs), received Royal Assent on 22 March 2021.

Under the new provisions, ERFs must identify accounts they hold on 1 June 2021.

The reporting and payment of ERF accounts will be due and payable by:

  • 30 June 2021 – for ERF low balance accounts (less than $6,000).
  • 31 January 2022 – for all other accounts held by ERFs.
  • If an account balance decreases or increases after 1 June 2021 it does not change the due date.

ERFs can commence the voluntary transfer of any amounts to the ATO from 1 June 2021 up until the day the statement and payment is due. The timeframes are a minimum, for example, an ERF can choose to pay their over $6,000 accounts to the ATO at any time from 1 June 2021.

The new provisions also prevent any amounts being transferred into ERFs on or after 1 May 2021.

More information can be found here.

Superannuation co-contribution scheme

The superannuation co-contribution scheme aims to help low- or middle-income earners boost their retirement savings.

If you’re a low- or middle-income earner and make personal (after-tax) contributions to your superannuation fund, the government may also make a contribution (called a co-contribution) up to a maximum amount of $500.

The amount of government co-contribution you receive depends on your income and how much you contribute.

More information can be found here.

Request for rollover of whole balance of super benefits between funds

A new version of the ‘Request for rollover of whole balance of super benefits between funds’ approved form has been created as there is no longer a general distinction between SMSFs and other superannuation entities.

More information can be found here.

Getting ready to lodge your SAR by 15 May 2021

Some SMSFs have their annual return (SAR) due by 15 May 2021. You will need to appoint an auditor no later than 1 April 2021, to meet the May deadline.

In preparation for your lodgment, you also need to complete a market valuation of all your assets, prepare your fund’s financial statements and provide signed copies of these to your auditor so they can determine your financial position and your fund’s compliance with superannuation laws.

More information can be found here.

Your SMSF may have a TBAR due 28 April 2021

The transfer balance account report (TBAR) for some SMSFs is due by 28 April 2021.

The TBAR is separate from the SMSF annual return (SAR). This is one of your trustee reporting obligations.

Your SMSF is required to lodge a TBAR by 28 April 2021 if:

  • a transfer balance account (TBA) event occurred in your member’s SMSF between 1 January and 31 March 2021, and
  • any member of your SMSF has a total super balance greater than $1 million.

More information can be found here.

Trustee reporting obligations checklist

The ATO has published the Trustee reporting obligations checklist to help you finalise and lodge your SAR correctly. You can find the checklist here.

Key superannuation rates and thresholds

The following rates and thresholds apply to contributions and benefits, employment termination payments, superannuation guarantee and co-contributions:

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