Tax planning checklist 2018

May 28, 2018

2019 Christmas Parties & FBT

December 10, 2019

Superannuation planning pre 30 June

Contributions pre 30 June, 2018

Concessional contributions cap (deductible)

The maximum contribution for 2018 is $25,000.

Be extra careful with timing cut offs with last years June, 2017 contribution(s), and this years June, 2018 contribution(s).

From 1 July, 2017 the 10% work test has been removed. As such, the concessional (deductible) contribution can be made via salary sacrifice from your employer or can be made personally.

Non-concessional contributions cap (non-deductible)

The maximum non-concessional contribution from 1.07.17 to 30.06.18 is $100,000.

The member needs to be under 65, or meet the work test, and have not already exceed the non-concessional contributions cap via prior year contributions.

It is also important to note that if the member’s combined superannuation balance exceed $1.6m, then the member is not allowed to make any non-concessional contribution, even if they have no TBC yet.

Any non-concessional contribution in this scenario would be subject to excess contributions tax.

Transitional arrangements for 2018

2017–18 bring-forward period
Total superannuation balance on 30 June 2017	Maximum non-concessional contributions cap for the first year	Bring-forward period
Less than $1.4 million	$300,000	3 years
$1.4 million to less than $1.5 million	$200,000	2 years
$1.5 million to less than $1.6 million	$100,000	No bring-forward period, general non-concessional contributions cap applies
$1.6 million	nil	na

source ATO Website

Cut off / timing
For those that have checked their calendar, 30 June, 2018 is a Saturday. As such, to ensure that the contribution is received by the Fund trustee before 30 June, it would be prudent to make sure the contribution is made and accepted before Friday 29 June.

Any amounts credited via BPAY or online transfer to the funds bank account after 30 June, 2018 will not deductible, even if transferred pre 30 June. If the ATO become aware of the deduction, it would be denied, with potential for significant penalties and interest.

For those last minute decisions, evidence of a cheque being provided to the Fund trustee, for example on 29 June, 2018 should still allow the tax deduction in 2018 tax year. Make sure you have a signed and stamped letter, and that the cheque is promptly banked as supporting evidence.

In order to maximise efficiency, providing our office with the following would be much appreciated:

– connecting bank feeds to our software (speak to our team)

– providing the 30 June, 2018 valuation report of all listed securities

– providing the 30 June, 2018 bank and term deposit statements

– providing unlisted investment valuations

– providing redemption summaries, year end tax statements and quarterly distribution statements for unlisted and listed trusts

– providing full cost base details for asset disposals, together with the sale contract

– obtaining tax depreciation schedules for rental properties

– copy of market valuation as applicable for real property, or other assets

Pensions

Make sure that you have satisfied your minimum and maximum (transition 10%) pension payment requirements from 1.07.17 to 30.06.18. See table below.

Pensions from 1.07.17 must have the pension paid in cash (not via asset transfer / in specie).

In order to qualify as an income stream we also believe that the cash pension should be made in a minimum of two or more cash payments.

Percentage of account balance factors, by age
Age	2007–08	2008–09, 2009–10, 2010–11	2011–12, 2012–13	2013–14 onwards
Under 65	4.0%	2.0%	3.0%	4.0%
65–74	5.0%	2.5%	3.75%	5.0%
75–79	6.0%	3.0%	4.5%	6.0%
80–84	7.0%	3.5%	5.25%	7.0%
85–89	9.0%	4.5%	6.75%	9.0%
90–94	11.0%	5.5%	8.25%	11.0%
95 or more	14.0%	7.0%	10.5%	14.0%

Age is either at:

1 July in the financial year in which the payment is made
the commencement day if that is the year in which the pension or annuity commences.

‘Account balance’ means one of the following:

the pension account balance on 1 July in the financial year in which the payment is made
if the pension commenced during the financial year – the balance on the commencement day
if the amount of the pension account balance is less than the withdrawal benefit that the member would be entitled to if the pension were to be fully commuted – the amount of the withdrawal benefit.

Source: ATO website

Important…New event based reporting – TBAR reporting (more to come in next update)

2018 business and investment entity tax planning checklist here

Best Wishes,

Andrew and Team

Disclaimer. This publication provides an overview or summary only and it shouldn’t be considered a comprehensive statement on any matter or relied upon as such. The information in this publication does not take into account your objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it and obtain financial advice. Any taxation position described in this publication is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice. The rules associated with the super and tax regimes are complex and subject to change and the opportunities and effects will differ depending on your personal circumstances. Whilst we take great care with the accuracy of this information, we cannot be held responsible for any misinterpretation or inaccuracy in the above comments. You may not rely on this and should independent advice prior to taking any action. Laws are subject to change and this summary is current as at 6.06.18.