100% in Retirement Phase


If the SMSF has Retirement Phase Accounts only throughout the entire Financial Year, it's considered that all the SMSF's assets are held solely to support Retirement Phase Pensions. This is called being “100% in Retirement Phase”.


 
 
What is “100% in Retirement Phase” at all times?

The followings are some examples of situations when the SMSF is 100% in Retirement Phase at all times of the Financial Year:

1. SMSF with only Retirement Phase Pensions

Your SMSF is entirely in the Retirement Phase from 1 July (i.e. all balances for all members are in SABP/R-TRIS) and there is no balance in the Non-Retirement Phase Account during the Financial Year.

2. SMSF which converts entirely to Retirement Phase on 1 July

Your SMSF has a balance in the Non-Retirement Phase Account at 1 July but the balance is converted to Retirement Phase on 1 July (i.e. if all members commence SABPs with their entire balances or the TRIS enters the Retirement Phase by satisfying a condition of release) so that the entire SMSF is in Retirement Phase after this date, with no further balance in the Non-Retirement Phase Account for the remainder of the Financial Year.

3. Contributions and Rollovers immediately converted to an SABP

Your SMSF is entirely in the Retirement Phase from 1 July and any additional contribution or rollover made during the Financial Year is immediately converted to an additional SABP on the date of the contribution or rollover (subject to the Transfer Balance Cap). For more information on the process of commencing an additional SABP, please click here.

 
 
From 1 July 2017 to 30 June 2021

Between 1 July 2017 and 30 June 2021, when the DSFA rule applies (even if the SMSF is 100% in Retirement Phase at all times of the Financial Year), the SMSF is required to use the Proportionate Method to calculate the ECPI for the entire Financial Year and obtain an Actuarial Certificate.

When the DSFA rule does not apply, the SMSF is required to use the Segregated Method to calculate the ECPI for the entire Financial Year and is not required to obtain an Actuarial Certificate.

 
 
After 1 July 2021

From 1 July 2021, if the SMSF is 100% in Retirement Phase at all times of the reporting Financial Year, the SMSF is required to use the Segregated Method to calculate the ECPI for the entire Financial Year and is not required to obtain an Actuarial Certificate.

Regardless of whether an Actuarial Certificate is required, the SMSF’s Total income for the entire Financial Year is 100% tax exempt when the SMSF is 100% in Retirement Phase at all times of the reporting Financial Year.  


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