SUPERCentral News
There are three principal differences between a reversion of the pension to the spouse of the deceased member and the issue of a new pension to the spouse of the deceased member.
Each 1 July various superannuation thresholds are updated by the ATO. For the 2024/25 the concessional contributions cap increased from $27,500 to $30,000 and the non-concessional contributions cap increased from $110,000 to $120,000. The CGT contribution cap also increased from $1,705,000 to $1,780,000. But the low rate cap amount which was $235,000 for the 2023/24 financial year did not increase – in fact, it was not even published by the ATO. What is going on?
From purely a superannuation perspective, the 2024 Budget has been a bit of a non-starter. Only two SMSF related announcements were made: the first relating to the deeming test for age pensions and the second relating to payment of SG contributions on Government funded Paid Parental Leave.
Now that the 2023/24 financial year is coming to a close, it will be necessary for individuals receiving pensions from their SMSFs, to ensure that the minimum pension requirement in relation to each of their pensions has been satisfied by 30 June 2024.
This article considers the application of the “catch-up” contribution provisions – when they can be made? How much can be made? And what happens if an excess of “catch up” contributions are made?
First, there is a theoretical maximum catch-up contribution limit. The unused concessional contribution cap arising in respect of a tax year can only be carried forward for at most 5 tax years.
The deeming rates are 0.25% (low rate) and 2.25% (high rate) and the deeming thresholds are $62,600 (single) and $103,800 (Couple- combined).
The income free areas applying for 2024/25 financial year are $212 (single - previously $204) and $372 (Couple combined - previously $360).
The key Super thresholds which will apply for the 2024/25 financial year are as follows:
Concessional contributions are superannuation contributions in respect of which a tax deduction has been claimed whether those contributions are made by the employer (or a related company of the employer) of the member or by the member themself. These contributions are subject to tax in the super fund at 15%.
Age Pension Rates from 20 March 2024 The maximum age pension rates from 20 March 2024 will be
This very issue was the subject of a recent private binding ruling (released 25 March 2024). The taxpayer had for a number of years (actual number was redacted in the published ruling) made personal superannuation contributions for which the taxpayer claimed a tax deduction. The actual amount of each of these contributions was not provided in the published ruling.
If you have funds that are still in catch-up mode or are on different deeds, talk to us about our bulk SMSF conversion program. This will ensure that your trustees have all the necessary powers to comprehensively and legally administer their funds and remain SIS compliant into the future – safeguarding them against potential legal, tax problems and associated penalties.
Contrary to popular belief, simply tearing up or ignoring signed legal documents does not eradicate its effect. The reality is, once a documented agreement is executed (by signature or common seal) it can only be unmade, corrected or amended by the signing of other relevant legal documents.
The Tax Office recently released its long-awaited guidance on how it will treat distributions from a family trust in situations where it believes that someone other than the recipient of the trust distribution will actually obtain the benefit of it, and the reason for distributing to the initial recipient was to save tax.
Where a superannuation fund (including an SMSF) makes a payment to a member where the payment is in breach of the payments standards, the payment will be included in the assessable income of the member and taxed in the member's hands at the member's marginal rate of tax. The payment is expressly excluded from the favourable taxation treatment which applies to superannuation lump sums. This is the result of s304-10(1) of the Income Tax Assessment Act 1997.
The SUPERCentral Governing Rules have been updated with effect from 17 February 2022. Some (but not all) of the key details of the changes to the Governing Rules are detailed here.
COVID-19 re-contributions are superannuation contributions which are a return to the superannuation system of a COVID-19 release amount. They are new personal superannuation contributions which have been identified by you as being COVID-19 re-contributions.
If you have SMSF trust deeds which have not been updated recently and you would like to hear how our SUPERCentral bulk update process works, please give us a call on 02 8296 6266.