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18 Nov 2021 Superannuation

Clients requesting superannuation transfers

Due to recent changes to ATO Online, the ATO has identified an issue with fund to fund superannuation transfer requests using overseas or unreliable addresses drawn from ATO systems.

The ATO has been unable to deliver these requests to the identified funds as the state and/or postcode fields are returning as blank in these scenarios. Approximately 1,500 clients have been impacted across 85 funds.

To address this, the ATO will be contacting clients with overseas or unreliable addresses that have completed a superannuation transfer request on ATO Online since 14 March 2021, advising that they should contact their fund to complete the transfer.

If you have further enquiries on this matter, lodge a request using the Superannuation Enquiry Service. More information can be found here.

Changes to calculating ECPI introduced into Parliament

The Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 was introduced into Parliament on 27 October 2021. Schedule 5 to the Bill affects superannuation trustees that have member interests in both accumulation and retirement phases at one time, but only retirement phase interests at another time, during an income year.

Once this Bill is passed, it will allow affected trustees to choose to treat their assets as not being segregated current pension assets and, therefore, enable the fund to use the proportionate method for calculating exempt current pension income (ECPI).

The Bill also implements the following measures: 

  • Schedule 1 – amends the Superannuation Guarantee (Administration) Act 1992 to remove the $450 monthly income threshold before an employee’s salary or wages are subject to the superannuation guarantee (SG).
  • Schedule 2 – amends the Tax Administration Act 1953 to increase the limit on the maximum amount of voluntary contributions made over multiple financial years that are eligible to be released under the First Home Super Saver Scheme from $30,000 to $50,000.
  • Schedule 3 – amends the Income Tax Assessment Act 1997 (ITAA 1997) to allow individuals aged 60 and above to make downsizer contributions to their superannuation plan from the proceeds of selling their home.
  • Schedule 4 – amends the ITAA 1997 to apply the work test to individuals aged between 67 to 75 years who claim a deduction for personal superannuation contributions.
  • Schedule 6 – amends the income tax law to extend the temporary full expensing regime by 12 months, until 30 June 2023. The 12-month extension will provide eligible businesses with additional time to access the tax incentive. 

More information can be found here.

New stapled superannuation fund rules started on 1 November 2021: What employers need to do

From 1 November 2021, if you have new employees start and they don’t choose a superannuation fund, you may have an extra step to take to comply with the choice of fund rules. You may need to request their ‘stapled superannuation fund’ details from the ATO.

The ATO has also published a handy Reference guide for employers, which contains a summary of the new rules.

More information on what a stapled superannuation fund is, when and how to request stapled superannuation fund details and what happens once the request is made, can be found here.

Stapled superannuation fund webcast recording now available

Watch the ATO’s webcast on the extra step you or your employer clients may need to take from 1 November 2021 when an employee does not choose a superannuation fund. The webcast covers what to do and demonstrates how to request stapled superannuation fund details.

More information can be found here.

Have you reviewed your SMSF investment strategy?

Self-managed superannuation funds (SMSFs) are required to prepare and implement an investment strategy to help meet their investment and retirement goals. The investment strategy is not designed to be a ‘set and forget’ document but rather a strategy you continuously review to ensure you are meeting your retirement plans.

Your SMSF auditor will check to see if you have met the investment strategy requirements under the superannuation laws.

More information can be found here.

Conditions of release

To cash preserved benefits or restricted non-preserved benefits, a member must satisfy one of the conditions of release. Unrestricted non-preserved benefits may be cashed at any time.

Some conditions of release restrict the form of the benefit (for example, lump sum or income stream) or the amount of benefit that can be paid. These are known as ‘cashing restrictions’.

More information can be found here.

Rollovers

A rollover is when a member transfers some or all their existing superannuation between funds. The transferring fund can ask the receiving fund to show it is a complying superannuation fund.

Before you can roll over your benefits to your SMSF from another complying superannuation fund, the transferring fund will use the SMSF Verification Service to verify that you are a member of the SMSF and the fund’s details. You can check your membership by looking at the fund details screen on ATO Online.

More information can be found here.

Valuing your SMSF assets

Asset valuation is a key component in preparing meaningful SMSF financial reports. It is one of the tasks you need to complete before you can lodge your SMSF annual return (SAR). You need to complete a valuation of your assets on 30 June for the year you’re lodging.

It is important to have the valuation(s) done early as it is advisable to have these ready by the time you appoint an auditor.

More information on market valuation can be found here.

Using the SMSF early engagement and voluntary disclosure service

The SMSF early engagement and voluntary disclosure service provides a single-entry point for SMSF trustees and professionals to engage with the ATO early in relation to any unrectified contraventions.

More information can be found here.

Register of SMSF messaging providers

Refer to this list of SMSF messaging providers for your SMSF clients. SMSF messaging providers can provide an electronic service address (alias) for contributions and rollovers and release authorities.

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