Capital gains tax relief - start planning now

• Assessing the current circumstances of your fund including determining all your account based pensions or transition to retirement pensions.
• Reviewing if your fund was segregated and in receipt of a pension on 9 November 2016
  • Segregation will occur if you have specific assets set aside for specific members or all of the assets of your fund are supporting pensions (100% pension phase).
• Reviewing if your account based pension will be near the $1.6 million transfer balance cap and determining if you will need to take action to get under this cap.
• Gathering information about the current cost bases of assets you currently hold in your SMSF.
  • Considering when or if these assets will be sold and the fluctuations in market value they may have in the future.
• Determining with your advisor which option of CGT relief is best for you:
  • This could be choosing which assets to reset their cost base and paying any capital gain tax.
  • It may be choosing which assets to reset their cost base and deferring any capital gain tax.
  • Or it may be choosing not to reset any asset cost bases and not applying for CGT relief.
• Considering the future tax exempt make up of your fund. This includes whether:
  • Members will be entering retirement phase in the future.
  • Funds will be added to a member’s retirement phase in the future.
  • Funds in accumulation phase will be reduced in the future.

The legislation and implications are complex so early planning and discussions with your specialist advisor are essential.