Staying informed about changes in the world of superannuation is crucial for every trustee managing a Self-Managed Superannuation Fund (SMSF). As we head into the next financial year, it's important to be aware of key developments that could impact your retirement planning strategies. Here's a roundup of some recent updates you should know:
Valuing fund assets correctly for the SMSF annual return
The ATO has reminded SMSF trustees of the importance of correctly valuing fund assets for the SMSF annual return, flagging concerns that approximately 16,500 funds have reported certain classes of assets at the same value, for at least the last three years. Asset classes identified include property (residential and commercial) and unlisted investments (shares and unit trusts).
To address this concern, the ATO has commenced sending targeted messages to trustees and auditors and will monitor the approach taken by these funds in their next annual return.
Quarterly TBAR Reminder
Trustees must report Transfer Balance Account Report (TBAR) events to the ATO by April 28, 2024, if relevant events occurred between January 1 and March 31, 2024.
Note: Where there has been no TBA event during this period, there is no need to lodge a TBAR for this quarter.
Director ID Number and ASIC action
ASIC has brought its first action against a director for failing to have a director identification number.
Although the facts of this matter are not public, this action acts as a stark reminder that all company directors, including the directors of a special purpose company that acts as the trustee of an SMSF, must have a director ID.
Superannuation Rates and thresholds for 2024-25
The ATO officially released the updated superannuation rates and thresholds for the 2024-25 financial year.
Better targeted superannuation concessions (Division 296 Tax) – Draft regulations released
The Government released Treasury Laws Amendment (Measures for Future Instruments) Instrument 2023: Better Targeted Superannuation Concessions (draft regulations), to support implementation of the proposed division tax.
These draft regulations contain provisions that enable the calculation of Division 296 tax for defined benefit interests, including:
- outlining methods to value defined benefit interests, and
- making modifications to the Division 296 earnings formula to appropriately capture notional contributions to defined benefit interests.
Small Business Superannuation Clearing House (SBSCH) – Bank account verification
The ATO implemented an update to the Small Business Superannuation Clearing House (SBSCH) introducing SMSF bank account validation – aimed at bolstering the precision and security of superannuation contributions. This change affects all small employers who use the SBSCH to pay superannuation to employees’ SMSFs.
Cost of living tax cuts Bill – Legislation passed
The Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 received Royal Assent.
This bill amends the tax laws to modify income tax rate thresholds and tax rates for individuals for the 2024-25 and later financial years.
Trustee Disqualifications
The December update of the Disqualified Trustees Register shows 149 trustees were added for the December 2023 quarter. This brings the total number of disqualified trustees between 1 July and 31 December 2023 to 374.
Superannuation on Paid Parental Leave
The Government announced its intention to pay superannuation on Paid Parental Leave (PPL) entitlements from 1 July 2025.
ATO Statistics – SMSF quarterly statistical report (December 2023)
The ATO has published it’s SMSF quarterly statistical report for the December 2023 quarter.
The report highlights a continued trend of steady growth in the number of SMSFs, with a net increase of 6,743 SMSFs in the December 2023 quarter.
Looking at the member demographics of the new funds established during the December 2023 quarter, around:
- 55% of members were male, and 45% female, and
- 46% had taxable income between $80,000 and $200,000, while only 12.5% had taxable incomes above $200,000.
ATO Statistics – Annual SMSF Statistical Report
The Australian Taxation Office (ATO) has released its annual statistical report on Self-Managed Superannuation Funds (SMSFs) for the 2021-22 financial year.