An Overview of Super Reforms 2017

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An Overview of Super Reforms 2017

by Stefanie Doriguzzi

Considerations for SMSFs prior to 30 June 2017

The end of the financial year always seems to crop up faster than it should. Given the impending 1 July 2017 superannuation changes, trustees need to be across the changes, even if they don’t immediately affect you or your fund.

Over recent weeks, we have been in contact with clients to ensure end of year superannuation matters are attended to but we would like to remind you of the following key changes and obligations. If you have any questions about your personal superannuation position, please be sure to This email address is being protected from spambots. You need JavaScript enabled to view it..

This year it is essential that you consider maximising the existing contribution limits for superannuation before they decrease on 1 July 2017. While maximising contributions should be front of mind, it is imperative you don’t forget your other obligations as trustee of your SMSF and ensure that your SMSF stays on track!

Understand the value of assets at 30 June

SMSF trustees will need to know the total superannuation balance held by members as at 30 June 2017. If you have assets such as real estate in your SMSF, you will need to have a current valuation of those assets. Real estate needs to be valued at market value, and therefore an independent valuer is recommended if the asset is a significant part of the value of the fund.

Your total superannuation balance (TSB) is the total value of your accumulation and retirement phase interests and any rollover amounts not included in those interests. This is important as new rules apply from 1 July 2017 which will limit the ability and amount you can contribute to super as your 30 June overall TSB gets closer to $1.6 million in 2017/18.

In addition, from 1 July 2017 you will basically not be eligible to make non-concessional contributions (NCCs) when your 30 June TSB is $1.6 million or more.

Preparing for the $1.6 million transfer balance cap and capital gains tax (CGT) relief

Be aware of the new $1.6 million transfer balance cap that will limit the amount you can keep in the pension phase of superannuation from 1 July 2017. This new cap will limit the assets you can have supporting superannuation pensions to $1.6 million.

You should make sure that as of 1 July 2017 you only have $1.6 million in pension phase. This may require you to roll some assets currently supporting a pension back to accumulation phase where their earnings are taxed at 15 per cent. If you opt to sell fund assets to manage the cap, transitional capital gains tax relief may be available to manage any adverse tax outcomes.

It is essential that your plan to comply with the transfer balance cap and all relevant documentation is formulated by 30 June 2017. Minutes should be created detailing the fund members’ intent to transfer assets out of retirement phase to avoid breaching the new transfer balance cap. Minutes documenting how CGT relief is intended to be undertaken should also be produced.

Updating the SMSF trust deed

Over the years there have been continuous changes in superannuation legislation. Generally, super fund trust deeds should be drafted so that they don’t need to be updated all the time – a good trust deed should last 5 years as a rule.

As the recent major changes to superannuation become law and SMSF practitioners and trustees are getting ready for the big changeover on 1 July 2017, we suggest that your trust deed is reviewed to ensure it is compatible with current law.

What next?

If we have not already been in touch with you concerning any steps you should be taking to prepare for these superannuation changes, please contact us immediately.