Proposed changes to SMSF on 1 July changes may prompt trust deed updates
There are some changes possibly coming giving us a Superannuation Update 2022 – stay tuned!
SMSFs with more prescriptive trust deeds may need to make updates in order to take up some of the new opportunities commencing in July 2022.
There are some substantial changes happening from 1 July this year, including the removal of the work test for voluntary contributions between for those aged 67 to 75 years.
The work test will still apply for those wanting to claim a deduction for personal superannuation contributions.
There’s going to be a range of opportunities that open up for clients from 1 July 2022 that will really put the focus on non-concessional contributions [and that] recontribution process. With clients now able to make contributions right up till 28 days after the month in which they turn 75, there is now a much wider window for optimising contributions.
If we are able to look at contributions all the way through to 75, then there is going to be much greater interaction and interplay between the contributions going into super and pensions being run and whether you’re going to be taking amounts out by commutation and refreshing them and running possible multiple pensions.
We also note that there is also an age reduction for the downsizer that will occur from 1 July, with the eligibility age dropping from 65 down to 60 (this may also be dropping after the election to 55).
Before employing any of these strategies or others for SMSF trustees and members, we stress that one of the critical things to check is whether the SMSF’s trust deed is still up to date.
There are changes that are coming on 1 July, and some deeds may be prescriptive and therefore may require an update before you take up some of these opportunities.
Be aware of what you need to do and go back to your deed to ensure that you can do it.
Where SMSF trustees need to update their deed, the added importance of ensuring that the constitution links up to the deed is a must.
We will keep each of you updated, and like always, will keep you updated with any recommended changes on your part! In the meantime, we have what contributions you can have for your SMSF.