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Downsizer super contribution

From 1 July 2018, eligible individuals 65 years and older may be able to contribute some of the proceeds of the sale of their home into super.

To be eligible, you must be 65 years old or older, you or your spouse must have owned your home for 10 consecutive years, the home must be in Australia (and cannot be a houseboat, mobile home or caravan) and the home must be exempt, partially exempt or entitled to an exemption from capital gains tax under the main residence exemption.

An individual can contribute up to $300,000 ($600,000 for a couple) and the contribution will not count towards concessional or non-concessional contribution caps.  A contribution must be made within 90 days of the change of ownership of the dwelling.

Before making a downsizer contribution, professional advice should be sought to ensure that the concession is available to your situation, that it is appropriate and that your super fund will accept a downsizer contribution.

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Single Touch Payroll

The 30 September 2019 deadline for Single Touch Payroll (STP) reporting is approaching.  STP changes the way employers report their employees’ tax and super information to the Australian Taxation Office.  Under the new system, employers need to report each time employees are paid.

STP works by sending tax and super information from payroll or accounting software to the ATO when a payroll is run.  The STP payroll software will send a report to the ATO that provides employee, salary and wages details, PAYG withholding amount and super information.  Under the system, super funds will also be reporting to the ATO, so the ATO will be able to match reported payroll superannuation contributions to actual payments to the employees superannuation fund.

STP reporting is mandatory from 30 September 2019.  There are some concessional options for micro employers (employers with 1 to 4 employees) and for other limited circumstances. 

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ATO SMSF Investment strategy letter

The ATO has recently written to about 17,700 SMSF trustees and their auditors where they believe that the SMSF’s investment strategy may not meet the diversification requirement.  The ATO advises that they are writing to SMSF’s that hold 90% or more of funds in one asset, or a single asset class.

The ATO reminds SMSF trustees that their investment strategy must meet the following requirements.

  • the diversification of fund investments
  • the risks of inadequate diversification within the context of their SMSF investment portfolio (for example, the risks associated with the fund’s investments in a diversified portfolio of shares is likely to be lower than that of another asset class, such as cryptocurrency)
  • the making, holding, realising, and the likely return from their fund investments relating to their retirement objectives and expected cash flow requirements
  • the liquidity of their investments, allowing the fund to meet costs and pay benefits as members retire
  • whether insurance cover should be held for one or more members.