Welcome to ESUPERFUND’s March Newsletter.
In this issue, we inform you of the recent updates released by the Australian Taxation Office (ATO) in relation to the 2016-17 Federal Budget Superannuation Reforms. In addition, we look at some newly released updates to the Client Portal. Lastly, we highlight some audit requirements regarding expenses paid by SMSFs.
Client Services Manager
Keep Informed of the ATO’s Updates relating to the 2016-17 Superannuation Reforms
The changes to the superannuation system, announced by the Australian Government in the 2016-17 Budget, have been released with changes designed to improve the sustainability, flexibility and integrity of the Australian superannuation system.
The ATO is currently developing the best approach to implementing the Superannuation Reforms and detailed guidelines will be released gradually as the ATO progresses the administration of the changes within its current superannuation system.
During the last month, the following official resources have been published by the ATO:
ATO SMSFs Super Changes Webinar
The ATO has recently released a webinar to provide an outline of the latest superannuation changes with a focus on the impacts for SMSFs. It provided information to support SMSF Trustees to comply with the transitional rules as well as the new law post 1 July 2017.
The webinar recording can be accessed on the ATO’s website.
Overview of Super Changes for SMSFs
An overview of the Superannuation Reforms, along with the impacts on SMSFs can also be found on the ATO’s website.
Transitional CGT Relief
The draft Law Companion Guide (LCG) about Capital Gains Tax (CGT) relief has been finalised and released by the ATO on 08 March 2017.
Temporary CGT relief allows pensioners who will be affected by the Super Reform (i.e. TRAP earnings taxation measure / $1.6 million Pension Cap) to reset the asset’s cost base to its current market value on 30 June 2017. The relief will ensure that CGT is only payable (on the sale of these assets after 1 July 2017) on capital gains accrued from 1 July 2017. SMSFs must meet a set of conditions in order to apply the CGT relief.
Please visit the ATO’s website for a full description.
ESUPERFUND Will Guide You through the Superannuation Reforms
ESUPERFUND will update the website as the ATO releases further guidelines and you will be informed of the updates via our monthly client newsletters.
In the next issue of the monthly newsletter, we will provide detailed information in relation to the Contribution Reforms and explain some contribution strategies commonly used by SMSF Trustees. In addition, we will illustrate how CGT relief works with worked examples.
Updates to the Client Portal
We are excited to announce that new features and updates have recently been released on the Client Portal. We continue to improve the Client Portal to provide you with a better user experience and ensure that you receive convenient online solutions. Login to the Client Portal to explore the new functions! If you have any queries or suggested enhancements, please feel free to contact us.
What Expenses Can Be Paid by the SMSF?
Expenses can only be paid for by the SMSF where they relate to running the SMSF and the tax invoice for the expense is in the name of the SMSF. In addition, the expense cannot have an element of personal use. That is notwithstanding that an expense is incurred in the running of your SMSF, you cannot pay for the expense with your SMSF if there is an element of personal use. Additionally, you cannot pro-rata expenses based on SMSF usage, in the same way as you can with your Individual Tax Return.
Please also note that the SMSF related expenses should be paid from your SMSF bank account directly. It is preferable that expenses are not paid with personal funds. However, where this is unavoidable then it is possible for you to pay an expense on behalf of the SMSF. In this case, you must ensure that the tax invoice for the expense is in the name of the SMSF and the reimbursement happens soon after the personal payment (preferably limited to only several days).
You can visit our website to for more information about Compliance of Expenses.