ATO highlights overlooked CGT issues

“There’s a misconception out there that members needed to make an election before 30 June 2017. I just want to emphasise that’s not the case,” said Ms Macfarlane.

“Of course they need to make sure that they are eligible because they had a member that needed to take certain actions before 1 July 2017, or they were impacted by the transition to retirement stream changes, but apart from that, it’s not too late, provided that due date for SMSF’s annual return hasn’t passed.”

Ms Macfarlane also stressed that access to the CGT relief for those who are eligible isn’t automatic.

“You do actually have to elect to avail yourself of transitional CGT relief, and that election is irrevocable,” she said.

“The important point to remember is that election has to be made by the due date of lodgement of the SMSF’s annual return, and it is the actual due date, not the date that they lodge it, so if they lodge it late and they haven’t made that election, then it’s too late.”

Some SMSF clients, she said, would have had their lodgement date on 31 October, so if they didn’t make the election by then it’s now too late.

She also stressed that the ATO will not be collecting or maintaining information about the individual assets that an SMSF has elected to apply CGT relief to.

The election, she explained, only advises that the SMSF has elected to apply CGT relief at the total amount of any deferred gains if they’re using the unsegregated method.

“I just want to reinforce that it’s the responsibility of the SMSF trustee to keep those records of the individual assets to which CGT relief is being applied to, including the valuation details supporting recent cost bases of relevant assets,” she said.

“It’s an important point because while an SMSF trustee might make an election for transitional CGT relief, if they don’t have those records available in practical terms it’s going to be very difficult for them to actually apply that CGT relief when it’s time to do so.”