CGT relief errors still surfacing in annual returns
Mistakes with CGT calculations are still cropping up on a weekly basis, with some practitioners incorrectly calculating the CGT for assets that had the relief applied, warns a mid-tier firm.
Speaking to SMSF Adviser, Hayes Knight director of SMSF services Ray Itaoui said that last year was a huge year for CGT relief with the elections that had to be made, but there are still some residual issues he is seeing.
“I see around half a dozen examples every week where there has been some kind of event that’s occurred where the CGT relief hasn’t been factored in,” explained Mr Itaoui.
“If an asset was disposed where CGT relief had been applied, they don’t get the 12-month discount because the reset happened less than 12 months ago, so they’re not entitled to it, so I’m seeing errors where the CGT for those assets hasn’t been calculated correctly.”
It can be very difficult to pick this up from a review standpoint, he said.
While the software providers are generally very good at tracking this, there can still be issues also where someone has switched software providers or an SMSF has changed accountants.
“Tax agents and auditors should be reviewing those amounts before the return is finalised,” he advised.
“If you get those figures wrong, it affects your closing balances, which can affect your pension amounts for the next year, and it just snowballs into a bigger issue from something so small.”
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.
