A key ATO ruling (LCR 2021/2) was released today to update the original draft from 2019. It deals with the vexed issue of when transactions between a superannuation fund and another party potentially create non arm’s length expenses (NALE).

New rules allowing individuals to initiate a “bring forward” of future years’ non-concessional contribution caps up until the year they turn 67 (rather than 65) have finally passed. They will apply from 1 July 2020. What quirks should we watch?

Well one financial year ends and another begins. At Heffron we were fortunate to kick off the new year with a (positive) bang – we heard we’d won the 2021 SMSF Administration Provider award from SMSF Adviser magazine.

Since 1 July 2017, $1.6m has been a magic number in superannuation for all sorts of purposes, most notably the general transfer balance cap. Now that this has increased to $1.7m from 1 July 2021, what happens to other rules like segregation?

The first question is simple – they can. This legislation has passed and takes effect from 1 July 2021. The second question is harder – there are a number of factors to think about before diving into a 6 member SMSF.

The concessional contributions cap increases from $25,000 to $27,500 from 1 July 2021 – a good thing for anyone wanting to add to their super. But there’s another change just passed by Parliament relating to the consequences of exceeding the cap.

The end of the financial year always seems to bring on two things without fail – a flurry of last minute tax planning and a trigger for reflection on the previous 12 months.

Mostly, the people who belong to an SMSF are also in charge (the trustees). But sometimes another person steps in as trustee or director of the corporate trustee for a variety of good reasons. There are a number of special issues to consider.

The process can be relatively simple as it largely involves paperwork. It doesn’t require assets to be sold or moved to a new super fund but it does create some traps.

The new rules mean you could be making after-tax top ups as well, so it’s vital to get your timing right.

It’s time to give related party lease arrangements an annual health check. Is a rent adjustment due? Are trustees able to keep offering COVID rent relief? What about NALE announcements?

With no news in this month’s Federal Budget, we had assumed the temporary halving of the minimum pension draw down rates would cease on 30 June 2021 (as currently legislated). However, the Government has now announced an extension for one more year.