Lest we forget about your SMSF clients

There’s not doubt we’re all distracted with critical business services work at present.

Many of us have more work than we have time or resources to deal with it, but don’t let that be an excuse to forget about maximising year-end strategic planning for your SMSF clients.

Remember – these form the perfect opportunity to introduce Prime’s Wealth Advisers to your SMSF clients.

Recontributing pension withdrawals

Consider your clients who have already satisfied their pension minimums for the year that may not need the money. Are they eligible to contribute to their SMSF and if so, make contact with them so they can act on this prior to 30 June.

Account Based Pension Commutations

As the government has reduced the minimum pension requirement by 50%, any excess taken over the minimum should be considered for a Lump Sum Withdrawal instead of a being treated as a pension payment. This will aid in creating room in the Transfer Balance Cap should it be needed in the future.

Contribution Splitting

If you haven’t looked at it already for clients that don’t meet a condition of release, it’s not too late to consider contribution splitting between spouses for the contributions made in the 2019 financial year. Rebalancing spouses accounts early between each other can really aid in the maximization of the $1.6 million cap for each member

Maximinising non-concessional contribution caps

Not all clients are going to impacted by Covid-19 and there may be clients that have surplus funds they can get into super. Ensure you continue to ask the question of your clients without assuming everyone is suffering.

Co-contributions

For low income earners let’s not forget the opportunity to access the Government co-contribution.

There are two co-contribution income thresholds:

  • a lower threshold ($38,564 for 2019–20)
  • a higher threshold ($53,564 for 2019–20).

If a total income is equal to or less than the lower threshold and a client makes a personal contribution of $1,000 to their super account, they will receive the maximum co-contribution of $500.

SMSF fund expenses

For members in the accumulation phase, it is important that any expenses are actually incurred before 30 June are identified to be deductible in the current financial year.

Death Benefit Nominations

Ensure these are up-to-date and more importantly valid. Binding nominations need two independent witness signatures who are not a named beneficiary.

Early access to super

With over 800,000 Australians already registering for early access to their super this access is now live via MyGov.

Eligible citizens and permanent residents of Australia or New Zealand can apply for up to $10,000 in 2019–20 and up to a further $10,000 in 2020–21.Eligible temporary residents are able to apply once to access up to $10,000 of super in 2019–20.

To be eligible for early release of super, a citizen or permanent resident of Australia and New Zealand must be in one of the following circumstances:

  • They are unemployed.
  • They are eligible to receive one of the following
    • jobseeker payment
    • youth allowance for jobseekers (unless you are undertaking full-time study or are a new apprentice)
    • parenting payment (which includes the single and partnered payments)
    • special benefit
    • farm household allowance.
  • On or after 1 January 2020 either
    • they were made redundant
    • their working hours were reduced by 20% or more (including to zero)
    • they were a sole trader and their business was suspended or there was a reduction in turnover of 20% or more.

Temporary residents

To be eligible for early release of super, temporary residents must be in one of the following circumstances:

  • They hold a student visa that you have held for 12 months or more and they are unable to meet immediate living expenses.
  • They are a temporary skilled work visa holder, their working hours have reduced to zero and they remain engaged with their employer.
  • They are a temporary resident visa holder (excluding student or skilled worker visas) and they cannot meet immediate living expenses.

Applications can be submitted online through myGov:

  • until 30 June 2020 for the 2019–20 year
  • between 1 July 2020 and 24 September 2020, for the 2020–21 year.

Remember there is no tax payable on amounts released and these amounts to not need to be included in tax returns.

Extended deadline to 30 June 2020

You would have noticed the ATO have a blanket extension to 30 June. A reminder the Prime SMSF team are happy to help with any overflow assistance needed between now and then to assist with any of the above strategies for your clients.

For further information, please contact Olivia Long.

The information in this article contains general advice and is provided by Primestock Securities Ltd AFSL 239180. That advice has been prepared without taking your personal objectives, financial situation or needs into account. Before acting on this general advice, you should consider the appropriateness of it having regard to your personal objectives, financial situation and needs. You should obtain and read the Product Disclosure Statement (PDS) before making any decision to acquire any financial product referred to in this article. Please refer to the FSG (primefinancial.com.au/fsg) for contact information and information about remuneration and associations with product issuers. This information should not be relied upon as a substitute for professional advice, and we encourage you to seek specific advice from your professional adviser before making a decision on the matters discussed in this article. Information in this article is current at the date of this article, and we have no obligation to update or revise it as a result of any change in events, circumstances or conditions upon which it is based.

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