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Australia Extends Due Date For SMSF Returns

by Mary Swire, Tax-News.com, Hong Kong

12 May 2017


The Australian Tax Office on May 11 announced that it is to extend the due date for the filing of self-managed superannuation fund annual returns for 2015-16.

The deadline is being pushed forward to June 30, 2017, following feedback from professional and industry representatives.

"We have heard that many accounting and advisory firms are stretched to meet their usual annual SMSF lodgment commitments, in addition to providing advice to their clients about the superannuation changes taking effect on July 1," Deputy Commissioner James O'Halloran said.

"Accountants, tax agents and SMSF advisers play a key role in ensuring that their SMSF clients are ready for the changes on July 1. They will ensure their clients are in the best position to make informed decisions about their superannuation savings in light of the changes."

Among the changes is a reform to the personal super contributions deduction. Currently, a member (primarily self-employed) of a SMSF can claim a deduction for personal superannuation contributions where they meet certain conditions. One of these conditions is that less than 10 percent of their income is from salary and wages. This condition will be removed from July 1, 2017. The aim is to enable more people to utilize their concessional (pre-tax) contributions cap.

A number of changes to the regime are being rolled out from July 1. A Low Income Superannuation Tax Offset (LISTO) will replace the Low Income Superannuation Contribution. The offset will provide continued support for low-income workers, with the aim of ensuring they do not pay more tax on their superannuation contributions than on their take-home pay. Eligible members with an adjusted taxable income of up to AUD37,000 (USD27,400) will receive a LISTO contribution to their superannuation fund, equal to 15 percent of their total concessional superannuation contributions for an income year, capped at AUD500.

From July 1, 2017, the Government will introduce a AUD1.6m cap on the total amount that can be transferred into the tax-free retirement phase for account-based pensions. The general transfer balance cap will be indexed in AUD100,000 increments in line with the Consumer Price Index.

Reforms to the spouse tax offset will likewise enter into force from July 1, 2017. Currently, an SMSF member can claim a tax offset of up to AUD540 for contributions they make their spouse's eligible superannuation fund if the spouse's income, total reportable fringe benefits, and reportable employer superannuation contributions is under AUD13,800. The Government will increase the spouse's income threshold to AUD40,000.

The Government will lower the annual non-concessional (after tax) contribution cap from AUD180,000 to AUD100,000 per year. Members with a total superannuation balance above AUD1.6m at June 30 of the previous year will no longer be eligible to make non-concessional contributions. The Government will also lower the annual concessional contributions cap from AUD30,000 to AUD25,000. From July 1, 2018, members will be able to make "carry-forward" concessional contributions if they have a total balance of less than AUD500,000.

Finally, from July 1, 2017, the Government will remove the tax-exempt status of earnings from assets that support a transition to retirement income streams (TRIS) arrangement. Earnings from assets supporting a TRIS will be taxed at 15 percent regardless of the date the TRIS commenced. In addition, the Government will remove the anti-detriment provision, which enables a fund to claim a deduction in their tax return for a top-up payment made as part of a death benefit payment where the beneficiary is the dependant of the person.

TAGS: tax | pensions | accounting | fringe benefits | retirement | Australia | Tax

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