Accountants urged to lift their game
The Superannuation Complaints Tribunal (SCT) is currently working through a raft of complaints about tax deductions on super contributions and has called for accountants to lift their game.
The Superannuation Consultative Committee met at the Australian Taxation Office in Sydney last week, according to the SMSF Professionals' Association of Australia (SPAA) technical director Peter Burgess.
At the committee meetings, the SCT indicated that accountants need to take more care with clients who are looking to claim a tax deduction on a superannuation contribution, he said.
Individuals who wish to make a tax-deductible contribution must inform their superannuation trustee in writing before they roll over their account to another fund or start a pension, said Burgess.
SCT chair Jocelyn Furlan, who spoke at the committee meeting last week, told Money Management her organisation is currently working its way through 50 complaints relating to taxation.
"You can't lodge a notice if you've rolled out of the fund. And that's where we see the complaints: people roll out of the fund, and they complain about the trustee not having alerted them to the fact before they let them roll over," said Furlan.
But superannuation trustees have no legal obligation to warn their members about the potential consequences of rolling over their fund, said Furlan - although some funds do include a warning on their rollover form.
Instead, it is up to accountants to be better informed about the rules around what does and does not constitute a taxable deduction when it comes to contributions, she said.
Burgess said SPAA will be working on doing more education around the issue.
"Our members are specialists in this area, so we'd like to think that they're on top of this - but it doesn't hurt to be reminded of these types of rules," he said.
Institute of Chartered Accountants Australia head of superannuation Liz Westover said it is up to individuals to make sure they consult with their accountant before they go ahead and make a contribution to their superannuation fund.
"They need to engage with their tax advisers often before the decision's made to make these types of contributions, so that the paperwork can be done in a timely fashion," said Westover.
She added that clients often make contributions without consulting their accountants, and when the accountant finds out what they've done it may be too late.
"The client might tell them when they bring their tax work in [at the end of the financial year]: ‘By the way I've made a contribution, I want to make a tax deduction for it'," Westover said.
But by that time the client may have rolled out of their superannuation fund.
Westover acknowledged the need for ongoing education for accountants on the subject, and pointed to an article she has written on the subject entitled ‘The importance of paperwork'.
Recommended for you
Data and technology provider Novigi has acquired Iress’ superannuation consulting and managed services business from Apex Group.
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
