Superfund Planning

07 Jun Superfund Planning

1. Deductibility of superannuation contributions

To claim a tax deduction for super contributions as an employer or as an individual, the payment needs to be received by the fund before 30 June.  Merely incurring a liability will not work.

 2. Have you paid your minimum pension balance this financial year?

For members in the pension phase, ensure that you have received the required minimum pension amount by 30 June otherwise the investment income derived from the assets supporting that pension may no longer be exempt from tax. you are unsure about what the level of your minimum pension amount, please contact your client services manager.

3. Superfund Deductions

For SMSF members in the accumulation phase, fund deductions are usually not significant, but it’s important to ensure expenses are actually incurred or paid before 30 June in order to be deductible in that year.

4. Reduced concessional contributions cap

The reduction in the concessional contribution for individuals over 50 to $25,000, which took effect from 1 July 2012, may mean you need to take action before the end of the financial year to make sure the cap is not exceeded so you won’t incur excess contributions tax.

5. Government co-contribution

Take advantage of the Government co-contribution by making a non-concessional (after tax) super contribution before the end of the financial year. For every dollar of eligible contributions, the Government contributes 50 cents to your superannuation up to a maximum government co-contribution of $500. For 2012/13, the maximum government co-contribution is payable for individuals on incomes at or below $31,920 and reduces by 3.33 cents for each dollar above this, cutting out completely once an individual’s total income for the year exceeds $46,920.

6. Beware of excess contributions tax

Investors who want to make large superannuation contributions should exercise extreme care regarding the amount and type of contribution they make to avoid excess contributions penalties. For example, any type of contribution made during the two preceding financial years may impact on the contributions that can be made this financial year.