Do you have a Self-Managed Superannuation Fund (SMSF)?
Do you have more than $1.6 million in your SMSF?
If you answered yes to either of the above questions, this snapshot article is for you.
Effective from 1 July 2017, changes to superannuation legislation will place a cap on the amount of money that can be held tax-free in a SMSF. The cap will be $1.6 million, and the amount held in excess of this amount will be subject to tax.
If you and your spouse are members of your SMSF, your superannuation entitlements are likely to pass to your spouse in the event of the death of the first of you, which may mean that your individual balance then exceeds the cap.
If you have an SMSF, now is the time to check your member balance and, if your balance exceeds the cap, it is important you contact your accountant or financial planner to ensure you are not subject to a tax implication post 1 July 2017.
There may be the option to transfer your balance in excess of the cap to your spouse before 1 July 2017 (if your spouse has a lesser balance and subject to applicable contributions caps). A trust structure may also be an appropriate vehicle in which to hold funds in excess of the cap, but professional financial and taxation advice is essential before any decisions are made.
We often work collaboratively with accountants and financial planners in this space, and offer a service which ensures you are in a position whereby the new superannuation changes will not have a detrimental effect on the wealth you have acquired. We also ensure that any changes made to your SMSF effectively align with your estate planning.
If you require advice or further information in relation to any of the matters discussed in this article, please contact our Wills, Estates & Succession Planning team on 03 5273 5211.