The dual role as business owner and an SMSF trustee gives more flexibility over timing and amount of contributions and choice of investments.   The tax benefits of super are important but investment strategy is essential.

Here is a range of super issues, for end of this financial year, and for the new year.   Please ensure they are appropriate for your circumstances before adopting any, a phone call only takes a couple of minutes.

Contributions

1. Maximise concessional (deductible) contributions

For 2014/15, the concessional caps are:

under 49 at 1 July 2014                        $30,000

over 49 at 1 July 2014                           $35,000

The non-concessional (not tax deductible) cap is $180,000 but it is possible to put in $540,000 and then Nil in the next years.   This one is tricky as you need to also consider non-concessional contributions over the last 3 years to ensure the cap is not breached.

2. Ensure contributions are made before 30 June.

The ATO says the amount must be in the SMSF bank account no later than the 30 ^th , and if not cleared until the next day it is not deductible this year.

3. Contributions for those with a job and a part time business.

If you are receiving employer contributions, personal contributions are only deductible if the gross salary is less than 10% of all income.

4. Co-Contributions for lower income family members

A Fund member earning less than $49,488 a year and who chooses to make a non-concessional contribution of at least $1,000 may be eligible for a government co-contribution up to $500.   This is a 50% return on the investment and not taxable!

Capital Gains Tax

5. Contribute proceeds from sale of a business

As long as the conditions are met for use of the Small Business Concessions, and if the exemptions for 15 year ownership or retirement apply, these do not count towards the non-concessional cap as long as they are below the current limit of $1.355m.   This allows more tax free earnings in the Fund, and saving of CGT on the sale.

6. Offset CGT on investments with Concessional contributions

If a capital profit is made on the sale of an investment, eg., shares, the 50% taxable gain may be reduced or offset with a concessional contribution.   (However, see 3. above if employed).

Retirement Planning

7. Split concessional super contributions with a lower balance spouse.

Fund members can request the Fund to split up to 85% of their concessional contribution to their spouse's super account.   There are a couple of good reasons for this;   an enquiry recommended the government introduce a cap on tax free earnings from pension assets, and pensions are tax free for members over 60.

8. Eligibility for a Transition-to-Retirement pension (TRIS)

It is possible to start a pension from age 55 , even if still working.

9. Equalise balance between spouses

One way to achieve this is with non-concessional contributions, or using a withdraw-and-re-contribute strategy.   Also useful for estate planning.

10. If paying pensions, pay the required minimum

These are set percentages depending on age.   If the minimum pension is not paid, the amount drawn is treated as a tax free lump sum and the Fund pays tax at 15% on earnings.

Next Year

11. Extra savings

From 1 July 2015, the company tax rate reduces by 1.5% to 28.5%.   Put the saving into super and build your retirement capital.

12. Maximise next year's contributions

Budget so that you have the cash available to make maximum contributions next year.

Compliance

13. Value SMSF assets at 30 June

Historic valuations can no longer be used, fund assets must be shown at market value each year.

14. Records and documents

Auditors require bank statements for the whole year and especially the balance at 30 June, copies of term deposits, dividend notices, buy/sell notices for share, invoices for all expenses paid from the Fund.

15. Review strategies

Things to think about include:   the appropriateness of fund investment strategies and make sure these are written down, whether to use super funds for asset protection, insurance needs of members, and effectiveness of estate planning in place.

The material and contents provided in this publication are informative in nature only.   It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.