SMSF Annual Return 2012 and Impacts on PAYG Instalments

SMSF annual return 2012 and impacts on PAYG instalments

Over the years, we have identified that many self-managed super funds SMSFs are inaccurately claiming some deductions when they:

  • pay an income stream
  • are entitled to claim exempt current pension income.

To assist trustees in completing their annual reporting obligations and to ensure that they calculate the correct tax liability, we have made a significant change to how exempt current pension income (ECPI) is reported in the SMSF annual return 2012.

Label Y Exempt current pension income has now been inserted in Section B: Income of the SMSF annual return and now replaces label K, which was previously recorded in Section C: Deductions.

The new SMSF annual return layout will enable SMSF trustees to accurately claim deductions. The changes are also consistent with how the relevant legislation treats the income as exempt.

We will continue to closely monitor entitlements to claim an amount of income as ECPI and intend to review a number of SMSFs as part of our ongoing compliance activity.

Find out more

  • Self-managed super funds and tax exemptions on pension assets
  • Self-managed super fund annual return instructions.

This change will impact pay as you go (PAYG) instalments. The exclusion of ECPI will reduce the base assessment instalment income, thereby increasing the PAYG instalment rate. If an SMSF has nominated the instalment rate method to calculate their PAYG instalments, it is important to ensure ECPI is excluded from the instalment amount reported at label T1 on the activity statement.

Find out more

Choosing a payment option for your PAYG instalments