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EOFY Summary & What to Look out for in 2022

2021 07 04
Seamless SMSF
05 July 2021 — 2 minute read

Promoted by Seamless SMSF

With the 2021 financial year done and dusted, now is the perfect time to reflect on some of the major events that occurred as well as look forward to some changes we should be aware of in 2022. 

1. COVID Relief

For both the 2020 and 2021 financial years, the ATO provided relief to SMSF trustees that were affected by COVID, specifically in the following way:

  • Rental Relief
  • Loan Repayment Relief
  • In-House Asset Relief
  • Market Valuations
  • Early Release of Super

From 1 July 2021 all forms of COVID relief finish, therefore, it would be recommended to review each of your SMSFs to ensure compliance with the above areas (i.e., no relief is being provided).

2. Work Test

From 1 July 2020 the work test was extended from 65 to 67 years of age. This increases the number of members within the SMSF sector that can make contributions without the requirement of meeting the work test. 

3. Concessional Contributions 

From 1 July 2021 the concessional contribution cap has been increased from $25,000 to $27,500. 

4. Non-Concessional Contributions 

Although the bring forward provision (BFP) age has not yet been increased to 67 (still currently 65), the non-concessional contribution cap has changed. From 1 July 2021 the non-concessional contribution cap has been increased from $100,000 to $110,000. 

If the bring forward provision was triggered before 1 July 2021, the member will not have access to the increase in cap (i.e. only a maximum of $300,000 will be able to be contributed).   With the increased NCC cap, any BFP triggered post 1 July 2021 is subject to the new $330,000 cap.

5. 6 Member Funds 

From 1 July 2021, the maximum number of members for an SMSF or APRA fund has been increased from four to six. 

This change has been in the works for some time and provides incredible opportunities for all SMSFs!  We will release a blog in the coming weeks that will detail the pro’s and con’s of a 6 member fund.  Standby....

6. Minimum Pension Payments

Due to market conditions, the ATO reduced the minimum pension payment requirement for both the 2020 and 2021 financial years. From 1 July 2021, the minimum requirement has been increased to its original percentages. This has been summarised below:

Age

Minimum % withdrawal for 2022 FY

Reduced rates by 50% for the 2020 and 2021 FYs

Under 65

4%

2%

65–74

5%

2.5%

75–79

6%

3%

80–84

7%

3.5%

85–89

9%

4.5%

90–94

11%

5.5%

95 or more

14%

7%


7. Market Valuations

Regulations have now been updated by the ATO that require trustees to ensure valuations on assets are being assessed annually. This will therefore lead to valuations on assets such as property and collectables occurring more frequently (in most cases annually).  A market valuation does NOT include a real estate appraisal, unless that appraisal contains objective and supportive data.

Further ATO Guidance can be found here

8. Transfer Balance Cap

From 1 July 2021 the general transfer balance cap will be increased (due to indexation) from $1.6 to $1.7 million. 

Please note, that although the general transfer balance cap has increased to $1.7 million, this cap does not apply to all members. Every member has their own personal transfer balance cap which varies between $1.6 and $1.7 million, depending on their circumstances.

In the coming weeks, the ATO will be releasing a platform for members to view their personal transfer balance cap. 

Further information can be found here.

9. Retirement of eSAT

The program SMSF Auditors use to prepare and lodge auditor contravention reports, eSAT will be transitioning to an online system. Currently the eSAT program is desktop based. 

This long-awaited upgrade is currently undergoing testing. Release date is still to be determined. 

10. SMSF Rollovers

From 1 October 2021 SMSFs will need to use SuperStream to roll over super between their funds. SMSFs will also be able to receive and action certain release authorities electronically via SuperStream.

Further ATO guidance can be found here

Whilst there’s a lot of new changes, as always, our team are here to field any questions you may have in order to provide clarity and ensure you are across the changes.

 

EOFY Summary & What to Look out for in 2022
2021 07 04
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