eWombat search  

Financial Planning News

Articles archive
Quarter 2 April - June 2023
Quarter 1 January - March 2023
Quarter 4 October - December 2022
Quarter 3 July - September 2022
Quarter 2 April - June 2022
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 3 July - September 2014
Quarter 2 April - June 2014
Quarter 1 January - March 2014
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 4 October - December 2007
Quarter 3 July - September 2007
Quarter 2 April - June 2007
Quarter 1 January - March 2007
Quarter 4 October - December 2006
Quarter 3 July - September 2006
Quarter 2 April - June 2006
Quarter 1 of 2018
Articles
Why your retirement intentions are critical
Plans for study into elder abuse
Our website is really our digital office.
Dissecting the downsizer contribution
The Goldilocks effect - Economic and market update 4Q 17
Rates, inflation and yield - five graphs to help make sense of it all
Australia. All you need to know to be the expert.
Potential pension minefields
Confusion lingers over post-death insurance
Non-lodgement numbers slashed, 30,000 funds still in ATO’s sights
Business confidence hits 5-month high: NAB
New Year resolutions, New Year strategies
How will downsizer contributions work for SMSFs?
Where Australia is at. Our leading indicators.
‘Read the tea leaves,’ brace for cryptocurrency regulation, advisers told
Power of retiree super dollars
Beyond share prices
Financial advice is the leading trigger to review insurance inside Super
Opinion – 2018 to be the year of the machine
Rising risks to the status quo
UPDATE: Australia's vital statistics
As share prices rise, the risk-return trade-off gets tricky
Technical expert flags top 3 traps with CGT relief
Become a better investor through your holiday reading
Australia's vital statistics
Made in Albania? How globalisation is creating challenges for Chinese policymakers
Our Advent calendar for 2017
Technical expert flags top 3 traps with CGT relief

While SMSF practitioners may be familiar with the rules for CGT relief, there are some key areas where professionals are hitting snags with the practical aspects of applying the relief, says a technical expert.



       


 


SMSF specialist and former Perpetual Private head of strategic advice Colin Lewis said there is still a distinct lack of understanding of the CGT relief that will need to be addressed early in 2018.


“The irrevocable election needs to be made by the time the fund’s return is due in, which is either the end of February or in May,” said Mr Lewis.


What method should trustees claim the relief under?


One of the areas causing confusion is determining which method the fund will claim CGT relief under. Mr Lewis explained that this comes down to the way in which the fund was claiming exempt current pension income at 9 November 2016.


“That dictates going forward what method you use. So right at the outset at a very elementary level, were you a segregated fund or were you an unsegregated fund at 9 November 2016?” explained Mr Lewis.


If the fund was segregated then there will be two options available, he said.


“Now in all likelihood, the most attractive one is where the fund became a proportionate fund because it means they can then apply the CGT relief to any or all the fund assets, rather than to just to a specific asset that they’ve commuted back,” Mr Lewis said.


What date should be used?


The date that should be used is also confusing practitioners, as they may have made a contribution before 30 June, he said.


“If you were segregated at 9 November and you become unsegregated on 30 June, then all well and good, but where you put a contribution into the fund during that period, and you didn’t specifically segregate that contribution, then it becomes unsegregated as of the date of the contribution,” Mr Lewis explained.


This may have happened in circumstances where the members wanted to utilise their last opportunity to contribute the $540,000 worth of non-concessional contributions into superannuation, he said.


“So [in those cases], that’s the date that you’re actually using for the cost base reset, not the 30th of June,” Mr Lewis said.


Is the fund eligible?


One of the biggest areas of misunderstanding is around eligibility for the relief, where a proportionate fund became fully segregated, he said.


If there is a member in pension and a member in accumulation within a fund and the member in accumulation went fully into pension phase during the year, the fund may not be eligible for the relief, Mr Lewis warned.


“One of the criteria of the CGT relief for a proportionate fund is that you don’t become segregated at any time. So if the fund does become fully segregated by moving fully into pension phase during the year, then you are ineligible for CGT relief,” he said.


“[Also] if you had a segregated fund, on the other hand, and you didn’t commute the excess amount during the [2016-17 financial] year, then you haven’t become unsegregated and you won’t be able to apply the relief.”


 


By: Miranda Brownlee
21 December 2017
smsfadviser.com




14th-January-2018

        
FuturePlan Partners Pty Ltd, ACN 097 032 114, Corporate Authorised Representative of
SECURITOR Financial Group Limited, ABN 48 009 189 495, AFSL and Australian Credit License 240687,
Level 7, 530 Collins Street , Melbourne VIC 3000.