During end of year planning for self-managed superannuation funds (SMSF) one way to provide distinct value for your SMSF clients is to ensure that they do not become liable to pay any unnecessary tax.
Some SMSF trustees may be eligible to claim exempt current pension income (ECPI) based on some or all of their assets being in the pension phase.
Account-based and transition to retirement pensions are required to meet minimum pension standards each year. This involves making a pension payment in form and effect based on the age of the pensioner and the pension account balance at 1 July prior to 30 June.
Where the pension commenced during the financial year the minimum pension payment required will be based on the account balance at commencement and the minimum payment will be pro-rated based on the number of days remaining in the financial year. In addition, if the pension commenced in June no pension payment is required in that year to meet the pension standards.
The minimum pension payments required by the SIS Regulations are:
Remember a pension payment must be physically paid out of the fund – a journal entry is not sufficient.
The information in this document is provided by Accurium Pty Limited ABN 13 009 492 219 (Accurium). It is factual information only and is not intended to be financial product advice, tax advice or legal advice and should not be relied upon as such. The information is general in nature and may omit detail that could be significant to your particular circumstances. While all care has been taken to ensure the information is correct at the time of publishing, superannuation and tax legislation can change from time to time and Accurium is not liable for any loss arising from reliance on this information, including reliance on information that is no longer current. Tax is only one consideration when making a financial decision. We recommend that you seek appropriate professional advice before making any financial decisions.