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First Home Super Saver Scheme

The First Home Super Saver (FHSS) is a scheme that enables Australians to save for their first home inside their superannuation fund. The plan allows for faster saving with the before tax (concessional) treatment within super.

The 2017-18 Budget allowed individuals to make voluntary concessional and non-concessional payments into their super to save for their first home as of 1 July 2017. From 1 July 2018, individuals can apply to release their voluntary payments and associated earnings, to buy their first home.

To apply for the release of these funds, individuals must be at least 18 years old and:
– Never owned property in Australia (i.e., commercial or investment property, vacant land, a lease of land in Australia or a company title interest in land in Australia).
– Never requested the Commissioner to grant a FHSS release authority in relation to the scheme in the past.

An individual who has previously owned property in Australia may still be eligible if the Commissioner of Taxation finds they have suffered a financial hardship which resulted in losing ownership of a property.

When the Commissioner determines that an individual has suffered a financial hardship, they must also satisfy additional criteria at the same time they requested a FHSS determination.

Prior to saving, individuals should first:
– make sure their nominated fund will release the money, and;
– query their fund about any charges, fees or insurance considerations that may apply.

Any FHSS amounts received will also affect an individual’s tax for the year they request to release the funds. These individuals will receive payment summaries, where they will be required to include the assessable and tax-withheld amounts in their tax returns.

Individuals can also check their balances with their funds whenever they wish to see how much they have saved up. This will assist individuals to keep track of the maximum FHSS amounts they can request to be released.

Those individuals wanting a release of funds can apply to the Commissioner of Taxation for a FHSS determination and a release.

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News

Changes to SMSF 2017-18 annual return

June 15, 2018

There is a number of changes to the 2017-18 Self-managed super fund annual return (SAR) thanks to the super changes which came into effect on 1 July 2017.

Transition to retirement income stream (TRIS) account
The ATO has included a new label for the number of TRIS accounts an SMSF member has in accumulation phase.

A TRIS account is in accumulation phase unless the SMSF member has reached 65 years of age or has met another ‘nil’ cashing restriction condition of release (i.e., permanent incapacity, retirement or a terminal medical condition) and has advised their fund.

Limited recourse borrowing arrangements (LRBA)
New questions focused on the use of LRBAs and extra borrowings have been added to section H, items 15e and 16. SMSFs that hold assets under LRBAs will be required to complete these questions.

Correct calculation of a member’s total superannuation balance (TSB)
New labels to allow the make-up of the ‘closing account balance’ to be reported to support a more efficient calculation of a member’s TSB have been added.

The member’s TSB may affect their non-concessional contributions cap as well as other super caps from 30 June 2017.

Cessation of the temporary budget repair levy
Certain tax rates for superannuation entities have been reduced in line with the cessation of the temporary budget repair levy (payable by some individuals for 2014-15, 2015-16 and 2016-17).

These rates affected those individuals that applied to the taxable income of non-complying superannuation funds (47 per cent to 45 per cent) as well as the non-arm’s length component of the taxable income of a super fund (47 per cent to 45 per cent).

CGT relief
A new label has been added to the capital gains tax (CGT) schedule for the purpose of reporting deferred notional gains where the gain has been realised.

Early stage venture capital limited partnership tax offset
The ATO has added a new label to enable SMSFs to report the amount of unused early stage venture capital tax offset carried forward from the previous year.