Your superannuation checklist before June 30
The new superannuation legislation makes it critical to check that your super is structured correctly before 30 June. Yes you’re busy! But think of your future peace of mind. Here’s my action plan:
Your concessional contribution limit—get it right!
If you were aged 49 or over on 1 July 2016, your concessional contribution limit for this financial year is $35,000. If you were under 49, it’s $30,000. From 1 July 2017 this reduces to $25,000 for all members. Maximise it while you can!
Take advantage of non-concessional contributions before the limits change
These help you move investments into superannuation from your personal, trust or company name to control your overall tax position. The non-concessional contribution limit for this financial year is $180,000 and if you’re under 65 you can trigger the three year “bring forward” rule. From 1 July 2017 it drops to $100,000 per year and applies only if your total super balance is under $1.6 million.
Check if you can use the lump sum strategy before it cuts out on June 30
This can be a powerful strategy if you’ve reached preservation age but not age 60. It’s subject to certain conditions but members in pension phase (i.e. aged 55 to 59) can elect for their pension to be treated as a lump sum, accessing a lower tax threshold.
Double deductions can still apply so consider your assessable income this year and in the future
Just say you have a large taxable income this year but expect it to be lower next year. In this case you should consider making additional contributions before July 1 2017 into an unallocated contributions holding account. Of course, you must consider your contribution caps for the following year.
Ensure you’ve met the minimum pension obligations
Current rules allow a tax exemption for earnings inside a superannuation fund that supports a pension. However, the minimum pension must be withdrawn and cleared before June 30. Don’t be caught out!
Review your ability to make contributions
If you’re already aged 65, you must pass the work test of 40 hours in any 30-day period during the financial year before you can make a super contribution.
Can you get Capital Gains Tax (CGT) relief?
The CGT relief provisions are complex and apply to the current financial year for members drawing a transition-toretirement pension, or with pension balances of more than $1.6 million. Discuss this with your accountant and financial planner.
Review your estate planning
Are your strategies still valid and structured optimally for your circumstances? Given the imminent legislative changes it’s critical to review this along with your superannuation before June 30.
This is merely a brief snap-shot of some strategies to consider before the end of financial year for the sake of your superannuation—and your peace of mind.
For further information contact Derek on (02) 4923 4000 or email firstname.lastname@example.org