contact Tag financial
Tag financial mailing list
Tag Financial Client Login Client Portal
Join our mailing list
Tag financial on Google plus Tag financial on LinkedIn Tag financial on Facebook

Technical Update: Pre 30 June Strategies for Superannuation – June 2015

With 30 June fast approaching, if you haven’t already, now is the time to engage with your clients to ensure they have met all necessary requirements for the financial year to keep their superannuation affairs working as hard as they possibly can for them.

Maximise your contributions

Concessional

Aged 50 or over – $35,000
Less than 50 – $30,000

If your clients are salary sacrificing, check their payments to ensure they are on track to maximise their concessional contributions for the year. Remember that an individual who is self-employed must meet the 10% rule to claim a deduction for contributions.

Non-concessional

The new cap for 2015 of $180,000 gives more room to make larger non-concessional contributions. With the bring-forward, an individual can contribute $540,000 this year if they are less than 65 years of age. However, this is only if the bring-forward provisions have not been triggered in either of the two previous financial years. The previous limit of $450,000 remains for any bring-forward already used.

Individuals aged over 65 need to meet a work test to make any contributions, and cannot use the bring-forward provisions.

Importantly remember that regardless of the type of contribution made, a Fund must receive the contributions before 30 June. Keep this in mind with any transfers and deposits that enough time is left for processing.

Spouse Contributions

Clients with spouses who have Adjusted Taxable Income (ATI) less than $10,800 can obtain a maximum tax offset of $540 for a spouse contribution. The tax offset decreases as the spouse’s income exceeds $10,800 and cuts off when their income is $13,800 or more. The spouse must be under 70 years of age.

Government Co-contribution

If you have clients with ATI less than $34,488, they are able to make a non-concessional contribution and the Government will match this contribution with a co-contribution of up to $500. This tapers out at $49,488. To be eligible, individuals must earn at least 10% of their income from carrying on a business or as an employee, be a permanent resident of Australia and under 71 years of age at the end of the financial year.

Pensions

If individuals are in receipt of a pension from their Superannuation Fund, ensure they have taken enough to satisfy their minimum pension obligations for the financial year. Failure to do so is likely to see their superannuation earnings taxed at 15%, rather than 0%.
If your clients suggest they “don’t need the money”, consideration should be given to a re-contribution strategy. However, a members age, work status and previous contributions will impact on the ability to execute this strategy.

Preservation Age

Effective 1 July 2015, the preservation age will be increased to age 56. For anyone born between 1 July 1960 – 30 June 1961, their preservation age will fall into this category and therefore practitioners should be conscious of this when discussing access to benefits and pension commencements.
For example, an individual born on 1 July 1960 will turn 55 on 1 July 2015 – they will need to wait a further 12 months before they will have access to their superannuation benefits.

Practical implementation – tips and traps

More Information
If you need assistance with end of financial year strategies, please do not hesitate to email us or phone (03) 9886 0800.

Latest from the tag blog

Trustee Training Video

July 24, 2017

When you set up a SMSF, you become the trustee of your SMSF.  You can have the fund’s technical aspects handled by qualified experts but you are still the ultimate boss. In this video, Brenda Hutchinson, Partner Superannuation Advisory and Audit, will cover your role and responsibilities of being a trustee and more! Ensure you are the […]