1) Maximising Superannuation Contributions
Review your contribution types and amounts, to ensure, contributions have been optimised for the current financial year and that caps have not been exceeded. Contribution caps for the 2014/2015 financial year are:
- Non-concessional: $180,000 or $540,000 for individuals under age 65 on 1 July 2014 using the bring forward provisions;
- Concessional: $30,000 or $35,000 for members who were aged 49 or over on 30 June 2014.
Before making any additional superannuation contributions, it is important to check the amount of contributions made to superannuation in the current financial year and the previous 2 financial years to ensure that the contribution caps are not breached.
2) Making a Non-concessional contribution to superannuation to qualify for the Government Co-contribution of up to $500
Making a Non-concessional contribution to superannuation may entitle a you to a Government Co-contribution of up to $500. The Government Co-contribution is paid where an eligible member’s Total Income for the 2014/15 financial year does NOT exceed $49,488, the contributing member was less than 71 years of age at 30 June 2014 and at least 10% of their income is generated from eligible employment activities or carrying on a business.
Given that an annual cap applies to the amount that can be contributed to superannuation, it is important to note that the amount you contribute will count towards your Non- concessional contribution cap. However the amount of the Government Co-contribution does NOT.
3) Contributing to a spouse’s superannuation account to qualify for a Tax Rebate of up to $540
Contributing money into a spouse’s superannuation account can help reduce the gap between a couple’s retirement savings and can also provide a Tax Rebate of up to 18%, to the contributing spouse (18% of first $3,000 contributed, maximum offset of $540).
The Tax Rebate applies where the receiving spouse has a total income of under $13,800. This also includes non-working spouses. Any amount contributed counts towards the receiving spouse’s Non-concessional contribution cap. Therefore it is important to assess the amount of Non-concessional contributions made in the past for the receiving spouse to ensure the contribution will not result in them exceeding the cap.
4) Contribution Splitting
Contribution splitting is an effective strategy to re-distribute superannuation monies to a spouse who has a lower superannuation balance. You can split up to 85% of their last year’s concessional contributions (up to the concessional cap) with you spouse. Non- concessional contributions CANNOT be split.
The transfer from your superannuation to spouse’s superannuation can generally only be done in the year following the one a contribution was made. In addition, any amount split does NOT count towards the receiving spouse’s concessional or non-concessional contribution caps.
5) Commencing an Income Stream in June
Where superannuation money is used to purchase an income stream in June, no pension payment is required to be drawn in that financial year. In addition, where a person is turning age 60 in the next financial year, starting an income stream in June will enable them to defer their first pension payment until they turn age 60, when the pension payments and any lump sum draw downs will be tax-free
6) Re-starting your Transition To Retirement (TTR) Pension before 30 June
Where salary sacrificing has been recommended as part of your TTR strategy, combining the amount salary sacrificed during the year with your pension account and re-starting the TTR pension will help to maximise the amount that can be invested in the tax-free investment earnings environment.
7) Tax File Number (TFN) status
Where a superannuation fund does not have your TFN before the end of the financial year, employer contributions made on their behalf will be subject to tax at an additional 31.5%. Therefore, it is important to ensure the member’s TFN is provided to the Trustee of the superannuation fund before the end of the financial year.
8) Pre-paying tax deductible expenses
Pre-paying tax deductible expenses before the end of the financial year may allow you to include these expenses in their 2014/2015 tax return.
Examples of tax deductible expenses include:
- Premiums for Income Protection Insurance held outside of superannuation environment
- Interest payments on Investment Loans
- The cost of maintenance and repairs to investment properties.
9) Tax Deduction for Superannuation Guarantee
Employers must ensure the Superannuation Guarantee and Salary Sacrificed amounts are paid before 30 June to enable deductibility in this financial year. Although employers can pay the Superannuation Guarantee by 28 July 2015 and avoid the surcharge, the deduction will NOT be available until the tax year in which it is actually paid.
10) Managing Capital Gains Tax (CGT)
There are a few ways of managing the CGT. If an asset was sold during the 2014/15 financial year and triggered a capital gain. This includes:
- Selling assets that trigger a capital loss before 30 June 2015 so the loss can be offset against capital gains realised in the financial year
- Personal Taxation Issues.
Please note this is a general advise. Before you act on this advise you need to seek professional advise to confirm whether it is for you.