Government Delivers SMSF-friendly 2018-19 Federal Budget.
An SMSF-friendly budget coming out of the 2018-19 Federal Budget brings excellent news for SMSF accountants. With SMSF members still working through the wide-reaching and complex superannuation changes which took effect on 1 July 2017, this Federal Budget will provide much-needed stability while looking to reduce costs for SMSFs and prove additional flexibility.
The fundamental changes proposed for SMSFs and superannuation are:
Three‑yearly audit cycle for some self‑managed superannuation funds
The Government will change the annual SMSF audit requirement to a three-yearly requirement for SMSFs with a history of good record keeping and compliance. The measure will start on 1 July 2019 for SMSF trustees with a history of three consecutive years of clear audit reports that have lodged the fund’s annual returns promptly.
Expanding the SMSF member limit from four to six
As already announced, the Federal Government confirmed its decision to expand the number of members allowed in an SMSF from four to six. Expanding the definition of an SMSF to a fund with a maximum of six members will provide greater flexibility in how funds can be structured.
Work test exemption
The Government will provide more time for Australians aged 65 to 74 to boost their retirement savings by introducing an exemption from the superannuation work test.
This exemption will apply where an individual’s total superannuation balance is below $300,000 and will permit voluntary superannuation contributions in the first year that they do not meet the work test requirements.
Life insurance cover in super to be opt-in for individuals under 25 years of age
The Government will legislate that life insurance coverage in superannuation will be opt-in for those individuals under 25 years of age or with account balances under $6000 to ensure that unnecessary fees do not erode smaller balances. Life insurance cover will also cease where no contributions have been made for a period of 13 months.
Kreston Stanley Williamson Team
*Correct as of May 2018
Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.