SMSFs cautioned on traps with lodgement extension
The extension of the lodgement date for SMSF annual returns may present some traps for practitioners and clients where there isn't adequate time to update information for the fund, a consultant has warned.
Miller Super Solutions founder Tim Miller said while both of the lodgement extensions for SMSF annual returns have certainly been very welcome by the industry, as it provided more time to deal with commutations and CGT relief, there are a few administrative traps that practitioners should be wary of.
“We all love a lodgement extension because it gives people more time to finalise everything from the previous year, however, it also means that it takes longer for people to get funds up to date,” said Mr Miller.
“So people may not have had adequate time and information to be able to make contribution decisions for the 2017/18 year, with the total super balance rules.”
Mr Miller said he can foresee issues with excess non-concessional contributions because some trustees will have inadvertently contributed amounts that are under the cap, but because of the total super balance they weren't entitled to make those contributions in the first place.
“So I think it’s those sorts of administrative advice pieces, which are linked back to information from the end of a previous year and where you might not have that information till late into the next financial year, that can create problems.”
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.