Review your investment strategy
Ensure you look into any tax implications when assessing your retirement investment strategy. Within your superannuation fund, investments with capital gains sold while in accumulation will be taxable in the fund at a maximum rate of 15 per cent, or 10 per cent where the investment has been held for longer than 12 months.
Fund income, including capital gains while the superannuation fund is paying retirement pensions, may be wholly or partially exempt from tax. How these concessions apply will depend on several factors. If there are members in the fund still in accumulation phase and others in the pension phase, specialist tax advice should be sought to ensure your fund is structured appropriately.
Paying Retirement Benefits
Is your SMSF trust deed up to date? Any changes may affect the retirement benefits paid to you. Your transfer balance cap limits the amount you can use to start a retirement phase pension. If you have not had a retirement phase pension before, your transfer balance cap will be $1.7 million.
You will need an advisor to assist you as pension documentation including member applications, trustee minutes and a product disclosure statement will be needed.
If your amounts exceed your transfer balance cap, they may be kept in the super system in an accumulation account. You may be able to withdraw lump sums in addition to your pension payment if you have met a condition of release. However, unlike your pension payments, investment income derived on amounts retained in an accumulation account is not exempt from tax.
It’s important to review any estate planning before starting your pension. Here’s a blog to help guide you on the benefits of estate planning – https://aspectaccountants.com.au/news/benefits-of-estate-planning/
Need help with your retirement plan and finances in Perth? Aspect Accountants and Advisors have over 15 years’ experience managing small business accounting.