Welcome to ESUPERFUND’s July Newsletter.
In this issue, we remind you that the new superannuation rules have taken effect as of 1 July 2017. We also highlight key dates for the upcoming 2018 Financial Year, including the release date for the 2017 Financial Year Online Checklist. Next, we inform you of the abolishment of Automatic Pension Merging starting 1 July 2017. Additionally, we introduce you to some Client Portal updates. Lastly, for newly established SMSFs we provide details on the Rollover process.
Client Services Manager
There are some important changes concerning SMSFs released by the Government that you should be aware of. For easy reference, we have summarised these government changes in a table for you on our website.
If you established your SMSF with ESUPERFUND before 01 July 2017, you will be required to complete our Online Checklist to enable our office to prepare your SMSF's Annual Return.
Please note that the 2017 FY Online Checklist will be released progressively from late July and will be available via the ESUPERFUND Client Portal to all clients by 7 August 2017. Upon the release of your Online Checklist, an email notification will be sent to your registered email address. Please ensure that your registered email address is valid. You may have to check your spam folder in your email account if you have not received it by 7 August 2017.
To ensure prompt lodgement of your SMSF’s Tax Return, please complete and submit the Online Checklist at your earliest convenience. Checklist completion is the first step of your Fund’s 2017 Annual Compliance process, so please remember the above key dates. You can visit our website for more information on the Annual Compliance Process.
Until 01 July 2016, ESUPERFUND processed automatic pension merging for pension members. The purpose of the merging process was twofold:
From 01 July 2017, ESUPERFUND no longer processes annual pension merging (regardless of pension type). Please Click Here to check the reasons:
Simple Account Based Pension (SABP)
When you have reached age 65 OR between preservation age ~ 64 and retired
You can access an SABP. SMSF earnings associated with the SABP were tax free until 30 June 2017.
From 01 July 2017, a $1.6 million Transfer Balance Cap (TBC) was introduced to restrict the total amount of superannuation benefits that you can transfer into a tax-free retirement account.
Superannuation benefits accumulated in excess of the cap can remain in the accumulation account, where the earnings are taxed at up to 15% (click here for more detailed information).
To assess whether the member complies with the transfer balance cap, the ATO will impose additional reporting obligations such that certain events (e.g. pension commutation / new pension commencement) will need to be reported within a certain time frame (detailed guidelines to be published by the ATO at a later stage).
Consolidating Multiple Pensions
As part of the pension merging process, members' existing pension(s) need to be commuted on 30 June first, and then a single new pension is established on the following 1 July. Such events will need to be reported to the ATO in the future. Therefore, consolidating multiple pensions will not reduce income tax, instead it will impose additional reporting obligations.
Merging the Member's Accumulation and Pension Accounts Annually
If the member has already reached or is close to the Transfer Balance Cap, converting the accumulation balance to SABP automatically on 1 July may unintentionally breach the member’s TBC.
From 1 July 2017, Trustees will need to apply for an additional SABP by contacting ESUPERFUND if they wish to convert accumulation balance to pension mode, provided the member has an available cap space in the transfer balance account which allows for additional SABPs to be commenced.
Transition to Retirement Pension (TRAP)
When you have reached the preservation age but are under 65 and not retired
You can access a TRAP. SMSF earnings associated with the TRAP were tax free until 30 June 2017.
You can still access a TRAP but earnings on the amount supporting it will be taxed at 15% from 1 July 2017 (click here for more detailed information).
There are no tax incentives to convert accumulation balance to TRAP on 1 July every year.
We are excited to announce that a few page-updates and new pages have recently been released under the “Compliance” tab of your Client Portal. We continue to improve the Client Portal to provide you with better user experience and to ensure that you receive convenient online solutions. Login to your Client Portal to explore the new functions!
We would also like to inform you that a few updates have recently been made to the Inbox function of your Client Portal. Please note that most of our communications with you will in future be through the Inbox in your Client Portal. Login to the Client Portal to explore your Inbox!
You can transfer your existing super benefits from other superfunds into your SMSF once your SMSF has been established. For more details, please refer to the step-by-step-guide on our website.
I have been with ESUPERFUND close to its origins and have not looked back since. They have held my hand through to first class administration, all for a lazy few hundred dollars. They’re worth twice the price. ESUPERFUND becomes more streamlined and efficient year on year, making the process easier for me to focus on investments.
ESUPERFUND Pty Ltd as Trustee for ESUPERFUND Trust ABN 37 842 535 715
General Advice Warning
The contents of this website are of a general nature only and have not been prepared to take into account any particular investor's objectives,
financial situation or particular needs. ESUPERFUND does not provide financial product advice or recommend any financial products:
This applies equally to those financial products which are established for your SMSF when you become a client of ESUPERFUND.
Where this publication refers to a particular financial product then you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the PDS before making any decision about whether to acquire the product.
We also recommend that you should seek professional advice from a financial adviser before making any decision to purchase any financial product referred to on this website.
While the sources for the material are considered reliable, responsibility is not accepted for any inaccuracies, errors or omissions.
When setting up a SMSF it is important to understand that additional fees may apply that must be carefully considered prior to making a decision to setup a SMSF including an
ATO Supervisory Levy
Company Trustee Setup Fee (where applicable)