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Self-managed super fund mistakes to avoid for EOFY

It is important for investors to have a good understanding of their SMSF to help reduce tax bills and maximise their wealth. To avoid being issued an SMSF audit by the ATO, investors should take the following advice on board:

– Read the trust deed to gain a better understanding of how the fund works.

– Have a regularly revised investment strategy, which takes into consideration liquidity, risk and return, diversification, meeting liabilities and insurance.

– Update binding death nominations to ensure that trustees pay the income and capital of the trust to intended beneficiaries.

– Utilise the transition-to-retirement pension if you’re still working and aged between 55 to 64. Any assets invested in a pension are free from capital gains tax and earnings tax. Also, investors will be able to reduce their mortgage and increase their tax-free contributions.

– Optimise contributions into the SMSF. Investors who turned 49 on June 30 last year are eligible to invest $35,000 into their fund and claim a deduction. The contribution limit remains $30,000 under that age. Self-employed members can contribute a lump sum, but if they are employed under a salary arrangement, they must have salary sacrificed that amount during the year.

– Submit SMSF tax returns on time.

Posted on 1 June '15 by , under Super.

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Amnesty means that 24,000 businesses own up to underpaying Aussies superannuation

An amnesty scheme which ended earlier this month has caused around 24,000 businesses to admit to underpayment of their worker's super. A total of 588 million dollars will be distributed to almost 400,00 individuals.

The scheme, which covered payments from the introduction of super in 1992, gave employers the opportunity to come clean without any consequences as long as they paid the unpaid super as well as 10% interest for every year the money was overdue.

The ATO will be directing its attention at any businesses that did not admit fault and these businesses will face severe penalties.

Many individuals are looking to access their superannuation early in order to have support during these times. Although there is criticism of early access to super, this facility has been helpful to many families to keep afloat.

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