End of Financial year considerations for self-managed superfunds

13 Jun

The end of the financial year is fast approaching and we strongly recommend that trustees of self-managed super funds review their existing arrangements to ensure full compliance with superannuation legislation. Areas that will need your attention are as follows:

Review and update of the fund’s investment strategy

Legislation requires the trustee/s to regularly review the fund’s investment strategy. The investment strategy must now also consider insurance for every member of the fund, along with the usual considerations such as risk, composition of investments, liquidity of investments and ability to discharge liabilities. When considering insurance the trustee/s must:

  1.    Assess their members’ need for risk insurance against their existing insurance arrangements                   (in and outside of superannuation);
  2.    Determine any shortfalls;
  3.    Discuss these findings with each member and obtain their feedback;
  4.    Agree on an action plan with each member (if applicable);
  5.    Document this process.

Our trusted financial advisor, Rob O’Donnell at our office can assist trustees to prepare/review/update a fund’s investment strategy if required.

Obtain market valuations for assets

The fund’s assets must be valued at market value as at 30 June when preparing the annual financial statements. If your fund holds property you will be required to obtain an independent valuation (from a real estate agent) every three years.

Review Death Benefit Nominations

An Enduring Power of Attorney passes authority to another if a member becomes mentally incapacitated.  Apart from ensuring your affairs are looked after if you cannot act, this simple document can avoid compliance issues for the fund and avoid problems if a member loses capacity.

Preparing a Death Benefit Nomination Form (Binding or Non-Binding), or a non-lapsing Death Benefit Agreement is essential if you want your superannuation monies to be paid to a specific beneficiary upon death.  Additionally there may be tax issues for the beneficiary if they are classified as a ‘non dependant’ so please discuss further with our office if you require clarification on this.

Ensure minimum pension payments have been made

Our office provided confirmation of the minimum (and maximum if applicable) pension thresholds for the year ended 30 June 2019.

If you fail to take the minimum pension payments for the year, your fund will be deemed to be in accumulation phase for the full financial year. This may have significant tax implications for the fund.  You should review pension payments now and ensure that the required minimum amounts have been withdrawn pre 30 June 2019.

Consider Contribution Thresholds

2019 Limits

Non-Concessional                           $100,000*

Concessional                                      $25,000

*There is a 3 year bring forward provision that may allow additional contributions. However this is dependent upon the age of the member and prior contribution history.  Please contact our office and clarify first before exceeding the $100,000 threshold.

Additionally there is a ‘work test’ that must be satisfied prior to making any contributions if the member is aged 65 or over at the time of making the contribution.

If you require assistance with meeting your obligations or require further explanation please contact your Stratogen Accountant immediately.

It is imperative that the above issues are considered prior to 30 June to ensure compliance with superannuation laws and to avoid the imposition of financial penalties on you as trustee of your self-managed super fund.

Need advice?  Please contact your Stratogen Accountant on:   07 5474 0711