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Practitioners skipping over CGT relief, warns mid-tier

Practitioners skipping over CGT relief, warns mid-tier

Warning
Miranda Brownlee
21 March 2018 — 1 minute read

A mid-tier accounting firm says SMSF practitioners in some instances have been failing to apply the CGT relief where it would be beneficial for clients and has urged practitioners to review returns before 30 June.

Speaking to SMSF Adviser, Hayes Knight director of SMSF services Ray Itaoui said he has come across a number of SMSF annual returns where the previous accountant or adviser hasn’t advised the client that they can access the CGT relief.

With the ATO confirming that SMSF trustees who previously answered ‘no’ to the CGT relief in their 2016-17 SMSF annual return can amend it before the lodgement due date, SMSF practitioners, he said, may want to review returns for any new clients or returns where CGT relief hasn’t been looked at carefully.

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“We’ve taken over some accounting jobs from other practices where they haven’t implemented the CGT relief for 2017, and now staff have identified that the CGT relief could have been applied,” said Mr Itaoui. 

“We’ve been able to go back and have those tax returns amended and have those elections made to create a better outcome for the client.”

Mr Itaoui noted, however, that where CGT relief has been applied, but it was applied incorrectly, this cannot be amended as it’s an irrevocable election.

“Once you actually lodge that election you can’t go back and change it, so if they have lodged the election, it’s done,” he cautioned.

He also said that while the number of errors with the CGT relief has been falling in recent months, around one in every five funds still tends to have an error.

“Some of the errors are small, some are more significant.

“The main areas where we’re seeing the problems are the timing of when the CGT relief applies and also completing the tax return and the deferral amounts,” he said.

 

Miranda Brownlee

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 has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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