SMSF practitioners told to take immediate action on CGT relief
Perpetual has warned SMSF practitioners that the process of resetting the cost base of assets in client super funds could be complex and time-consuming, and should be addressed urgently.
Perpetual senior manager of strategic advice Colin Lewis said SMSF practitioners with clients affected by the $1.6 million transfer balance cap will need to consider whether their clients should take advantage of the CGT transitional rules listed in the super reforms.
“The government is allowing people to reset the cost base on assets. The reason they’ve done this is that they don’t want to disadvantage people where they’ve got to revert back to the accumulation phase,” explained Mr Lewis.
Mr Lewis warned, however, that SMSF practitioners and their clients only have between November and 30 June next year to reset the cost base.
“It may mean work and time so you don’t want to leave it till June to think about it. It’s something SMSF practitioners should be getting onto now,” he said.
“You may not want to reset it right away today, but you need to be aware of what the implications are of what you’re doing and what assets you want to do the reset for.”
The legislation allows the cost base to be reset on an asset by asset basis, he said, and if any assets have experienced a loss then it won’t be in the client’s best interests to reset the cost base of that particular asset.
“So if you’re at a loss, of course you’re not going to reset your cost base, but if you do have unrealised capital gains then it would be wise to reset the cost base to ensure that going forward you’re only going to be taxed on the upside of the growth from July next year,” he said.
“The message really is that people really need to look at this, advisers, practitioners, trustees need to look at their position, and work out whether it’s relative for them to do it. You can’t all of sudden come to the 1st of June next year, and think you’ve got a month to do this because you might run out of time.”

Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
- Can the cost base of the assets be reset on different dates for different assets or do all assets chosen for cost base reset need to be reset on the one and same date between November and 30 June
0 - a night mare to track investment within $1.6M Cap0
- My understanding is that if you have well over $1.6 million in retirement phase in any members account in an unsegregated SMSF, capital gains tax relief is available.
Individual assets that are forced out of retirement phase into accumulation phase on 1 July (providing the asset was in retirement phase when the legislation was introduced to the House of Representatives) are eligible for this relief.
I read in the press “you should reset your cost bases before the end of this financial year”.
All very nice and but just glib journalistic generalisation without any practicality.
But how is this documented and when.
Oh and when does the ATO need to receive ?
So many SMSF are only ever valued for 30 June but that often involves the accountant doing this exercise maybe 6 months later in preparation of tax returns.
At the same time the retirement income stream is often commuted causing the supporting assets to fall back to accumulation allegedly at one minute to midnight and then a new retirement income stream started at one minute after midnight.
This allows the accumulation fund to be reset to zero with everything again in retirement phase.
Although the intent for this to happen may, and I stress may, be documented prior to 30 June the figures are only finalised when the accountant does the valuation and the actuary provides a certificate maybe 6 months later.
Now that the new legislation has become law, do we actually have to document and submit the resetting of cost bases to the ATO before 1 July 2017 or will it be submitted along with SMSF’s tax return.
Apparently the reset of cost bases can be done (dated) at any time between now and up until midnight 30 June 2017.
So resetting the cost base when the share market or even individual company share holdings are at their highest may prove beneficial.
But this would need documenting and submission to ATO how and when ?
The ATO may be amazed at how good I was at judging when shares had reached their 7 month highs if my accountant is allowed to submit the documentation 6 months into the next financial year.
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