Last minute SMSF, Super and Tax strategies before 30 June

Last minute SMSF, Superannuation and Tax strategies before 30 June

 

Lots of technical catches in that summary.

First tip probably needs more guidance
1.Think first. First tip is to think carefully on each strategy before implementing any of them. review the eligibility criteria and your own personal circumstances. Then if you are not 100% certain make sure you get personal advice from a licensed adviser and or tax adviser.

One of the bigger issues is the concessional contribution issue. You check your super statement today and the employer contributions to date are $12,500. This Friday the employer contributions from the March quarter and June quarter are paid and credited (employer read about the ATO amnesty and accountant warned they may lose tax deductions) ...So excess contributions of $8333 may now occur. The ability to convince the ATO of special circumstances to avoid excess contributions tax are likely to be close to zero %.

 

Hi @Paul@PFI

Not sure where the $8333 came from in your above post? I am assuming you meant that say for example the employer had contributed $12,500 for the first half of the year and whacks in another $12,500 on Friday then that's your $25k limit hit. So I was wondering what you meant with the $8333? This Friday is 29th June which is still "this financial year" so anything credited on Friday ought to be part of "this financial year".

I suspect I'm missing a particular point in your post?

Thankyou in advance.

 

I didnt want to explain in detail where I got it to demonstrate how different employers and employees could each assume different issues and have different outcomes. How do you know if the $12500 already credited didnt include Q4 2017 ?? What about a one off bonus ? and so on....

Credited to...No, no, no. It must be received by the fund. The exception to this is if the employer uses the clearing house system as the fund will get the funds credited with that date.... Medicare clearing seems to be a law to themselves. That is a deemed receipt when Medicare / ATO get it. Many employers use EFT which can have a day transfer issue. ie Will credit Monday if paid Friday depending on bank and what time. Others are BPay - 1-2 days. Then its a weekend too. Non-bank days are not credited same day as date paid even with same bank after 5pm. (Complex reason involving Savings Bank v's Business accounts (Trading Bank))

 

I shall re-phrase.

OK so this implies employer put in $12,500 for the period July2017-December2017. For the March and June quarter some more money of an undetermined amount comes in this Friday. If the amount for March and June quarter is a total of $12,500 or less and there are no bonuses or other payments, then fine, all is within the total of $25k for the financial year.

Still not sure where the $8333 reference came from?

 

$25K max limit
Less Q4 2017 paid into fund in 2018 year say $4166
+ 2 quarter x $4166
Therefore YTD contribution = $12500
New extra contribution today of $12500
Employer contributes $8333 (Q3 and Q4 that employee thought was already there)
Total contribution $33,332

Excess contribution is $8333

We see heaps of these sorts of examples... not always that big. Some are. .One maxed contributions and then Fair Work had his past employer play catch up for four years. ATO argued it wasnt special circumstances. Another didnt realise his employer was doing after salary sacrifice to a second fund and SGC to the main fund.

Common one is 5 employer contributions in a year. With final one dated 28th June.

 

I'll end up with one of those - transferred on 28 June 17 but bounced so paid after a couple of days after the mess was sorted out but still in this FY (not last fy).

 

I think the report should have mentioned the obligation to lodge your Transitional Balance Account Report by 30 June for pension funds.

A lot of guys will miss this.

 

Thanks @Paul@PFI , I understand what you were referring to now.

 

Last minute EOFY tips, traps flagged for super

 

Our are all done. Thanks to BGL. The whole concept of TBAR reporting could have been avoided (for the 500,000 SMSFs at least) if they improved the 2017 and all future SMSF tax returns so that each member account is shown rather then a member composite view of balances and movements. Is there a department within the ATO that look for the most complicated, difficult and costly process ?