Latest News

ATO flags PAYG obligations for SMSFs with legacy pensions

The ATO has reminded SMSFs that are paying capped defined benefit income streams to members to ensure they are meeting their PAYG obligations.

 

 

In an online update, the ATO said that since 1 July 2017, SMSFs have had pay as you go (PAYG) obligations to withhold tax from income streams they’ve paid to members where the member is 60 years of older or the member is under 60 years old, and it’s a death benefit capped defined benefit income stream where the deceased was 60 years old or over when they died.

“If the amount of tax you need to withhold is nil, you are required to provide the individual with a pension payment summary and lodge a PAYG withholding payment summary with us, usually by 14 August, following the end of the financial year in which the payment was made,” the ATO explained.

“Trustees with these obligations also need to ensure they are registered for PAYG withholding.”

Trustees with these obligations, it said, also need to ensure they are registered for PAYG withholding.

If you’re paying a capped defined benefit income stream to a member, make sure you have met your obligations.

SMSFs should register for PAYG, provide your member and the ATO with your member’s payment summary information and comply with the withholding obligations on your activity statement, the ATO said.

“Your members may also need to lodge or amend their personal income tax return,” the ATO said.

“Your members can use our defined benefit income cap tool to understand if and how income from these pensions needs to be included in their assessable income.”

 

Miranda Brownlee
21 March 2019
smsfadviser.com

 

General advice warning: This website contains information that is general in nature. It does not take into account

the objectives, financial situation or needs of any particular person.You need to consider your financial situation

and needs before making any decisions based on this information.


PRPIA Pty Ltd ABN 61 144 888 433
Corporate Authorised Representative
Charter Financial Planning Limited ABN 35 002 976 294
Australian Financial Services Licensee Licence number 234665
Principal Address: Level 22 / 33 Alfred Street, Sydney, NSW 2000

Financial Services & Credit Guide | Peter Meakin | Luke Andrews | William Tunbridge |
Legal Disclaimer | Privacy Policy | Terms & Conditions