In recent times, the government has been making changes to the self-managed super fund (SMSF) taxation laws frequently – it’s a way for them to regulate and control the tax concessions, as well as keeping up with the changing demands of the Australian population preparing for retirement.
SMSFs have become a very popular vehicle for Australians to manage their own super. However, an SMSF is not for everyone, and Rajeev Dixit of DBS Accountants believes that only people who are willing to take time and effort to learn all the rules and regulations surrounding an SMSF, or are willing to take advice from qualified advisors and act on that advice, can keep their SMSF running properly.
In the ever-changing regulatory environment, it is doubly important to keep up with changes in the SMSF rules and regulations. Having an advisor who stays up-to-date with such changes and is readily available to you for advice is crucial to ensure the trustees keep the SMSF compliant.
Are you working with someone who is difficult to get in contact with? We sat down with Rajeev to discuss what sort of changes the government is planning right now, and how it could affect existing accounts.
What’s changing in SMSF law?
In the last Federal Budget, two major changes were announced that affected SMSF law. They were about new caps for tax-free pensions and non-concessional contributions to an SMSF. The non-concessional cap has again been modified with recent announcements by the Treasurer.
“The new non-concessional contribution cap is $100,000 per annum, until a member’s super balance reaches $1.6 million,” said Rajeev.
“The old cap as announced on Budget night was $500,000 over the lifetime of the SMSF. The problem is that even with the new announcement, draft legislation hasn’t been released, so we will need to take a ‘wait and watch’ approach until the legislation is introduced and passed in parliament. We need to wait because the effective date of the legislation may be backdated to the announcement.”
It’s important to note all changes happening, and when they will become effective.As an SMSF trustee, you are responsible for:
- Staying up-to-date with technical aspects and changes to SMSF law;
- Ensuring all payments into and out of the SMSF are in accordance with fund regulations and tax laws; and
- Safeguarding all assets owned by the SMSF, and making sure they are being invested as per fund rules and investment policies.
In order to keep your SMSF compliant, a qualified accountant with appropriate SMSF authorisations can help. Specialists in SMSF management and with best practices regarding communication, DBS Accountants is the first choice.
Why is a good accountant important for an SMSF?
When you want to make any changes to your SMSF, you should confirm with your fund accountant and advisor. If the changes need to be made in a timely manner or within a deadline, then you’ll need to hear back from them quickly.
“If you are a trustee, you need to choose an accountant who stays up-to-date with regulations, is approachable and prompt at responding,” continued Rajeev.
“This is where DBS Accountants excels, because we have processes in place to ensure clients are responded to quickly. That way, they can take timely action and be sure that their fund is compliant.”
If the law changes and your accountant doesn’t let you know, the onus falls on you to check that your SMSF is compliant. Trustees are ultimately responsible for keeping their SMSF compliant with the law. If a trustee fails to do so, they can be fined, and worse still, the SMSF may lose the compliant status with all the tax concessions. Avoid this by choosing an accountant that is communicative and active, and set your SMSF up for success.
Contact DBS Accountants today for more information about the most recent SMSF law changes.
Rajeev Dixit is Authorised Representative 1239763 of Merit Wealth Pty Ltd, Australian Financial Services Licence 409361, ABN 89 125 557 002
This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information consider its appropriateness having regard to your objectives, financial situation or needs.