REMINDER Transitional CGT relief

Trustees have until Monday 2 July 2018 to lodge their 2016-17 SMSF annual return with an election for transitional CGT relief, as part of the super changes that came into effect on 1 July 2017.

Reminder for SMSFs to take advantage of transitional CGT relief

Transitional capital gains tax (CGT) relief is temporary relief available to trustees of superannuation funds including self-managed super funds (SMSFs) who adjust their asset allocations to comply with the transfer balance cap, and transition-to-retirement income stream (TRIS) reforms, that commenced on 1 July 2017.

reminderTo prepare for the transfer balance cap reforms, individuals may have needed to reduce amounts currently supporting superannuation income streams. They might have done this by transferring value from the retirement phase to the accumulation phase.

Additionally, where individuals have a TRIS that is not in retirement phase, earnings on assets supporting these superannuation income streams became taxable from 1 July 2017.

The relief ensures that for certain assets that were supporting superannuation income streams in retirement phase prior to 1 July 2017, a trustee can still receive a tax exemption on capital gains accrued but not realised.

Applying CGT relief will:

  • reset the cost base of an asset to its market value. The market value would be determined under the Valuation guidelines for self-managed super funds on the date the relief applies
  • allow you to defer a capital gain that arises when resetting the cost base for assets where you use the proportionate method.

You can visit the ATO's website for the full run down on the objective, eligibility and even case studies, or call the team at Intuitive Super to streamline the process for you. Call us on 1300 856 064 today.

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Source ATO

Last Updated:15-08-2019 13:21