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Capital gains and carried forward capital losses when an SMSF has disregarded small fund assets

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Hi there

With the new ECPI approach from 1 July 2017 for SMSFs, how should we handle the capital gains and carried forward capital losses when the SMSF has disregarded small fund assets and received an actuarial certificate% of 100%.  

 

Backgound:

An SMSF can’t use the segregated method for ECPI in FY2018 (e.g. has disregarded small fund assets), so it has to use the proportionate method. The actuarial certificate% for FY2018 is 100%. 

The SMSF has capital losses carried forward from FY2017 and has realised capital gains in 2018.

 

Question:

 

  • Do you think s118-12 of the ITAA 1997 allows the fund to completely disregard the capital gains realised in FY2018?  (In which case the fund  hasn't eaten any of the carried forward capital losses)
  • Or, do you think we have to go through the usual process when we don’t have segregated pension assets, i.e.
    • Offset current year gains against current year losses
    • Then if there’s still some gain left, offset that against the losses carried forward
    • Then apply the CGT discount (if available)
    • Then apply the 100% tax exempt % from the act cert

Thank you!

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Hi @JaneSmith,

 

Thanks for your patience!

 

We can provide general information here on our Community and your query depends on a number of factors. We have a Law Companion Ruling LCR 2016/8 which covers information about transitional CGT relief for complying superannuation funds and pooled superannuation trusts.

 

You can also find information about how capital gains and capital losses are treated when a SMSF has ECPI on our website which provides guidance and relevant examples.

 

If you require a more detailed response relating to your specific circumstances, you can contact our Super Advice area.

 

Thanks, JodieH.

 

 

2 REPLIES 2
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Hi @JaneSmith,

 

Thanks for getting in touch!

 

We're checking information with a specialist area regarding your query and we aim to get back to you as soon as possible.

 

Thanks, JodieH.

Highlighted

Best answer

ATO Certified

Community Support

Replies 0

Hi @JaneSmith,

 

Thanks for your patience!

 

We can provide general information here on our Community and your query depends on a number of factors. We have a Law Companion Ruling LCR 2016/8 which covers information about transitional CGT relief for complying superannuation funds and pooled superannuation trusts.

 

You can also find information about how capital gains and capital losses are treated when a SMSF has ECPI on our website which provides guidance and relevant examples.

 

If you require a more detailed response relating to your specific circumstances, you can contact our Super Advice area.

 

Thanks, JodieH.