As the Financial Year is drawing quickly to a close, the team at Intello thought you may appreciate a checklist of items that need to be checked off by July 1.
If you have any questions, contact the Support Team: admin@intello.com.au.
1. Reduced Pension Drawdown
Acknowledging that members may have seen their account balances reduce as a result of the pandemic’s impact on the share market, the Government has temporarily halved the minimum amount members must withdraw from their super fund as a pension for 2019/20 and 2020/21 Financial Years.
To receive this favourable tax treatment, minimum pensions must be physically paid in cash by 30 June and show as withdrawals from the fund’s bank statements.
2. Contributions for 2021/22
All contributions for this Financial Year must be received by June 30. Anything made on July 1 will be attributed to the 2022/23 Financial Year.
All contributions for this Financial Year must be received by June 30. Anything made on July 1 will be attributed to the 2022/23 Financial Year.
The contribution caps for the 2022 financial year are:
Type of Contribution | Cap |
Concessional (pre-tax) Non-concessional (after-tax) | $27,500 $110,000 |
The 2022 concessional contribution cap includes employer Super Guarantee contributions, salary sacrifice, and personal deductible contributions. If the caps are exceeded, you may have to pay excess contributions tax.
Changes to contribution work test rules from 1 July 2020 has opened up a new opportunity for those aged 65 to 66 who can’t pass the work test to increase their super balances with further contributions.
3. Review ‘carry forward’ concessional contribution caps
The carry forward rule allows individuals to make additional concessional contributions in a Financial Year by utilising unused concessional contribution cap amounts from up to five previous financial years (the first available year being 2019).
So if your client’s total superannuation balance was less than $500,000 at 30 June 2021 and they have not contributed the maximum concessional contribution each year since 2019, they can make “catch up” contributions prior to 30 June 2022.
4. Review SMSF Investment Strategies
SMSF investment strategies are under much closer scrutiny from auditors these days. Auditors are no longer accepting a generic document that attempts to cover every situation.
A fund’s investment strategy should demonstrate the trustee’s vision and decision making and as such is a key document of the fund. It is therefore important that we consider the following:
- Ensure clients review the investment strategy at least once a year and more often during economic uncertainty
- All significant investment decisions, such as the purchase of real estate, should be documented and refer to meeting the objectives of the strategy
- Demonstrate strategy decision-making – for instance, where fund assets are predominantly in one asset class, auditors will need to see documentary evidence that you understand the risk associated with this, and a management plan around it
5. Investment Valuations
Auditors require the valuation of the assets to be at current market value. For investments such as property the auditors will require an independent valuation every 3 years however if there is significant changes in market value a new valuation may be needed.
6. Insurances
If your SMSF is required to hold insurance for its members, ensure the insurance is at an adequate level of coverage and the premiums are paid.