- SMSF exempt current pension income falls by 50%
- Deductible employer and personal contributions all fall
- Net tax paid by SMSFs by almost 29%
As we all know each year the ATO releases historical aggregated tax statistics. It always provides a fascinating picture of how taxpayers deal with the various tax laws.
The Tax Office has released the 2017/18 financial year statistics. This represents the first year of the operation of the Morrison "popular" super changes.
For the sake of simplicity we'll assume that you recall all the changes that have been made.
1. Personal Super Contribution Deductions Available for Everyone
In 2016/17, 214,000 taxpayers claimed an average of $22,500
In 2017/18, 356,000 taxpayers claimed an average of $14,300.
So about a 60% increase in the number of taxpayers made a smaller overall contribution. In fact the total claimed as a tax deduction ;increased from $4.8bn to $5.1bn.
The ATO SMSF stats show that over the same period the total amount of "assessable personal contributions" fell over these two financial years.
2. Total Super Contributions
For this we need to refer to APRA and ATO data ($ billions):
It is notable that contributions into SMSFs decreased considerably yet those to APRA funds increased.
It is probably true that SMSF members were making contributions in advance in 16/17 financial year to allow for the decrease in the contribution caps from 1 July 2017 onwards.
3. Excess Contributions
The ATO stats show there was a 250% increase in the number of excess contribution cases. Conversely there was only a marginal increase in excess non-concessional contribution cases.
4. Super fund taxes
SMSF exempt current pension income fell from $28.5bn (2016/17) to $14bn (2017/18). This is a staggering fall. On the other hand exempt current pension income fell from $19.9bn (2016/17) to 19.0 (2017/18) in APRA funds.
5. Net non-arm's length income in SMSFs
In 2017/18 103 funds (out of 500,000 SMSFs that have submitted returns) declared $16m of income. The numbers in 2016/17 were 118 SMSFs and $44m.
6. Insurance for SMSF members
Only just over 100,000 funds nominated this deduction.
7. SMSF fund expenses (both management and administration and investment) – overall these items did not change much for the two financial years however there has been a re-ordering of expenses because for some funds assets have moved from being non-deductible (being used to pay a pension) to being accumulation assets.
8. SMSF taxable income: Overall increased from $16bn to $20bn over the two financial years with tax on that taxable income increasing by almost 29% to $3.1bn. But the number of entities paying tax only marginally increased.
On the other hand APRA funds paid $17.4bn in net fund tax – an increase of only 9% on the previous financial year.
9. Net capital losses: 154,000 SMSFs have $16.5bn of capital losses being carried forward in 2017/18; APRA funds have only $4bn
These create an interesting picture for sure.
We will all await with interest what the numbers look like for the 19/20FY given the Covid-19 disruption for the last 3-4 months of that financial year?