With a new financial year looming it is time for self-managed super fund members to review any superannuation changes. This allows for challenges and hidden benefits that may have been missed to be identified, corrected and pursued.
Self-managed super funds, in particular, have a huge number of regulations that must be adhered to, set out by the ATO, APRA and ASIC. These regulations are reviewed and modified frequently, so it is important to ensure your SMSF is up to date each financial year with all new conditions.
In this article we will cover:
- The main areas of SMSF to review
- Changes To Superannuation
- How Collins Mann can help
What Areas of My SMSF Should I Review?
There are four key aspects of self-managed super funds that you should review to check if changes to superannuation will impact you, these are:
Contributions are funds you pay into your SMSF account. These contributions are included in your fund’s assessable income at the end of each financial year. As per the ATO:
“The most common types of concessional contributions are employer contributions, such as super guarantee and salary sacriﬁce contributions.”
The amount you are permitted to contribute or that your employer is required to contribute can change year to year. Understanding Australian superannuation rules is paramount to staying on top of your SMSF account.
The assets purchased through your SMSF, including commercial or residential property, shares, stocks, bonds and collectibles. You will need to review any earnings these investments have made you and how they are being managed. This is also a good time to check that all investments are held in the correct name.
Lump sum withdrawals are permitted from your SMSF whenever you like, once you reach the age of 65 or are retired and have reached your preservation age. The amount you are required to withdraw once retired can change year to year.
SMSF regulation compliance
The rules around SMSF change regularly. It is important to review these superannuation rules in detail each financial year to ensure you remain in adherence. Failure to do so can lead to fines and a significantly increased taxation rate.
You should also review each year that your death benefits and estate plans are up to date and accurate.
Superannuation Changes In 2021
The biggest change that will impact self-managed super fund members in 2021 is the indexation of super contribution caps.
From the 1st of July 2021, the non-concessional contribution rules will be changed to allow those under the age of 67 to make non-concessional contributions up to $100,000 so long as their total balance at June 30 this year is less than $1.6 million. Previously this was restricted to those under 65.
Should you still be working, you stand to benefit from the increase in employer contributions from the current 9.5% to 10% from the 1st of July 2021. This is the first increase to employer contributions since it was frozen in 2014.
Other opportunities to boost your SMSF balance exist in 2021 thanks to changes in superannuation. Should you be looking to downsize your home and are aged 65 and over, you will be permitted to contribute up to 300,000 (600,000 for couples) as a downsizer contribution.
Should you wish to make a withdrawal, try to take advantage of the 50% minimum pension reduction which is being carried into the 2021 tax year. This will help keep your super balance stable.
From an investment perspective, all super funds, including your SMSF will now be required to provide more details regarding investment decisions to fund members. These need to demonstrate how these decisions were in the best interests of the fund members.
Always keep important birthdays in mind, if you are turning or nearing 60, 65, 67 or 75 there are some opportunities that you will be able to take advantage of or may be about to miss out on.
Let Collins Mann help You Stay Informed About Superannuation Changes
At Collins Mann, our fully qualified and licensed financial advisors understand superannuation changes inside and out. We stay on top of all relevant changes and help ensure you are not only compliant but able to take advantage of any new opportunities to grow your super.
Your superannuation is the key to growing your wealth and planning for a retirement of choice without compromise. With Collins Mann, we can help you strategise and get the most from your SMSF and keep you on track for the retirement you dream of.
Let us help you stay informed about superannuation changes and make the most of new opportunities they represent. Contact Collins Mann today on 07 3251 3200.