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As trustees move into the new financial year, there are a number of changes self-managed superannuation fund (SMSF) trustees need to be aware of:
1. New powers for the Australian Taxation Office (ATO). The ATO will have the power to make mandatory directions in relation to education of trustees, directions to rectify contraventions in a specified period of time, and issue administrative penalties against trustees for contraventions occurring from 1 July 2013. Trustees will be able to appeal penalties issued by the ATO through the Administrative Appeals Tribunal.
2. Superannuation guarantee (SG) contributions increase. The minimum SG contribution will be raised from 9 per cent to 9.25 per cent. The first increased payments are for the September 2013 quarter, which is due by 28 October 2013.
3. SG contributions for the over 70s. There will be an obligation for employers to now contribute for employees who are 70 years and over as the upper age limit for SG contributions is removed. It is also worth noting that as a result, employers may now be able to claim SG contributions as a deduction where an employee is over 75 and not covered by an industrial award.
4. Higher concessional contributions cap. For those aged 60 and over at any time during 2013-14, the cap increases from $25,000 to $35,000. Previous indications of a required balance of $500,000 to be eligible for the higher cap have been abandoned. (The increase does not apply to concessional contributions made by 50-59 year-olds until 1 July 2014.) There is no change to the non-concessional contribution caps.
5. Ability to withdraw excess contributions. Individuals can withdraw excess concessional contributions made to their SMSF made after 1 July 2013. Clarification on this process is still to come.
6. Auditors must be registered. SMSF auditors must be registered with ASIC from 1 July 2013. Auditors have been able to register since 31 January 2013 and will be issued with an SMSF auditor number or “SAN”.
7. Ban on off-market transfers abandoned. The “on again, off again” ban has now been removed from the draft legislation before parliament, so off-market transfers for listed securities remains in place.
8. Pension minimums increased. The government’s relief on the required minimum pension payments will end, with the minimum percentages returning to their “pre-market downturn” rates. This will impact upon both transition-to-retirement and account-based pensioners, resulting in higher minimum pension payments for the 2013-14 financial year.
9. NSW stamp duty on mortgages to continue. Another “on again, off again” and now “on again” situation. Despite promising for years to abolish mortgage duty as part of the original GST deal with the Commonwealth government, NSW just can’t bring itself to give up the revenue and yet again looks likely to defer the abolition, which was meant to start from 1 July 2013. SMSFs with corporate trustees who use a limited recourse borrowing arrangement to purchase property in NSW will continue to pay state duty on their mortgage documents for the foreseeable future – the only state or territory still imposing that duty.
10. Check SMSF trust deeds. Ensure SMSF trust deeds are up-to-date and compliant with the above changes and other recent legislation, which may affect transactions that trustees are contemplating.
Source: www.morningstar.com.au
