Plan now to avoid financial year stress, warns adviser
SMSF trustees and advisers should be planning now for the best tax strategies before the end of the financial year, says an SMSF industry expert.
Chris Reed, SMSF specialist adviser and director of Business Concepts Group, said the halfway point of the financial year is the ideal time to ascertain where funds sit in terms of contribution strategies and tax implications.
Mr Reed said if an SMSF is looking at re-contribution strategies, January and February are the best time to seek advice from their financial planners about the best way to implement these for the most beneficial outcomes.
“Trustees need to prepare for these in plenty of time – it’s not a good thing to be doing at the end of June or even May,” he said.
“If you know you're going to make some real contributions or start pensions, you should seek advice at the start of the calendar year.”
He said early in the year is the best time to review contribution strategies and to track what might be possible before 30 June.
“That could be concessional contributions, targeting caps, or perhaps there are some carried forwards from prior years that you may be looking to use,” he said.
“You should also be looking at spouse contributions and potentially non-concessional contributions and any additional things you may want to try to get into the fund such as cash or in-species contributions or moving shares or property into or out of the SMSF.”
Mr Reed said, for example, if a fund is going to realise a capital gain in the financial year, tax planning now would be of greater benefit than leaving it until the last few weeks of the financial year.
“You may have concessional contributions or be thinking of using the carry forwards, or a double deduction strategy as well which is available to self-managed super funds,” he said.
“A lot of people tend to look towards retiring around 30 June and advice around retirement planning with things such as setting up pensions and putting in place contribution strategies related to that should be considered early.”
He said the new year is also an ideal time to see if other strategies that take a little longer to plan need to be put in place.
“Some strategies do have a little bit of timing on them. For example, if you're looking at selling your own home and want to get some of that into super, the downsizer contribution might be available to you,” he said.
“But there's a time that you need to be able to get that in so once again, if there are strategies like this that you are having a look at, and seek some advice on, make sure that you are on top of those and get it done within the timeframe needed.”
