2022 SMSF YEAR END TAX TIPS + REMINDERS

The tax and superannuation laws are always changing, and we are here to help you stay informed.

As a Trustee / Director of a Trustee Company for your Self Managed Superannuation Fund (SMSF), you need to be aware of key changes each year and opportunities and risk areas.

Some of these reminders will help to minimise your tax. Others will reduce your exposure to an ATO tax audit.

Make sure that you keep up to date with everything that affects your SMSF.

Please carefully consider this information and contact us immediately if you have any questions we can answer or if there is anything we can assist you with.

Your 2022 End of Financial Year Reminders & Action Items

CONTRIBUTION CAPS

The concessional contribution cap for 2022 and 2023 is $27,500. These contributions are tax deductible contributions made from your employer or personal contributions.

The non-concessional cap is $110,000. These contributions are not tax deductible and are made from your after-tax funds.

The bring forward rule allows individuals under the age of 65 to contribute up to 3 years’ worth of non-concessional contributions to super in one year. Please note that if you have used the bring forward rule in 2020 or 2021, then your contribution cap will not increase until the 3 year period has passed.

Total Superannuation Balance (TSB)	Bring forward Contribution available
Less than $1.48 million	$330,000
$1.48 million to $1.59 million	$220,000
$1.59 million to $1.7 million	$110,000
Above $1.7 million	NIL

MINIMUM PENSION PAYMENTS

The Federal Government temporarily halved minimum drawdown amounts in March 2020 in response to the COVID-19 pandemic. This was introduced to allow pension members to withdraw less of their retirement savings and keep a greater amount invested.

Recently, the Government has announced that the 50% minimum drawdown reduction for pension payments has been extended to 30 June 2023.

Age	Default minimum drawdown rates	2020 to 2023 reduced rates
Under 65	4%	2%
65-74	5%	2.5%
75-79	6%	3%
80-84	7%	3.5%
85-89	9%	4.5%
90-94	11%	5.5%
95 or older	14%	7%

ATO PAYMENT DEFERRALS

We can liaise with the ATO and negotiate a deferral or repayment plan if you are having trouble paying any ATO liabilities. Please contact us immediately if you would like our assistance with this.

CONTRIBUTIONS TO SUPER

If you want to claim a tax deduction for super contributions as an employer or as an individual, these payments must be received into your SMSF bank account by 30 June 2022.

CARRIED FORWARD UNUSED CONCESSIONAL CONTRIBUTIONS

From 2020 carry-forward rules allow you to make extra concessional contributions – above the general concessional contributions cap – without having to pay extra tax.

The carry-forward arrangements involve accessing unused concessional cap amounts from previous years. An unused cap amount occurs when the concessional contributions you made in a financial year were less than your general concessional contributions cap.

To use your unused cap amounts you need to meet two conditions:

• Your total super balance at the end of 30 June of the previous financial year is less than $500,000.
• You made concessional contributions in the financial year that exceeded your general concessional contributions cap.

The amount of unused cap amounts you will be able to carry-forward will depend on the amount you have contributed in previous years, starting from 2019. You can use caps from up to five previous financial years.

Please note that if your combined income and concessional contributions are above the Div 293 threshold of $250,000, then you may have to pay an additional 15% tax on these contributions.

REVIEW YOUR INVESTMENT STRATEGY

Your investment strategy is your plan for making, holding and realising assets consistent with your investment objectives and retirement goals. It should set out why and how you’ve chosen to invest your retirement benefits in order to meet these goals.

The superannuation laws require that you must prepare and implement an investment strategy for your self-managed super fund (SMSF) which you must then give effect to and review regularly.

Your investment strategy should not be a “set and forget” document. You should review your strategy regularly to ensure it continues to meet the current and future needs of your members depending on their personal circumstances.

Certain significant events should also prompt you to review your strategy, such as:

• a market correction
• when a new member joins the fund or departs a fund
• when a member commences receiving a pension. This is to ensure the fund has sufficient liquid assets and cash flow to meet minimum pension payments prior to 30 June each year.

You should also review your strategy at least annually and document that you have undertaken this review and any decisions made arising from the review. For example, you could do this as part of the annual trustee meeting minutes. You should then provide these minutes or other evidence of a review to your auditor. This will show that you’ve met the requirement to review regularly and, where necessary, revised your investment strategy.

REVIEW INSURANCE INSIDE YOUR SMSF

SMSF trustees need to consider the need for insurance cover for the fund members when creating and reviewing the fund’s investment strategy.

Please contact us if you need assistance in calculating appropriate insurance amounts for the members in your SMSF and how these insurances should be structured, and we can refer you to a licenced financial advisor who can assist you.

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