With the end of the Australian Tax year fast approaching on the 30th June, you may want to start considering whether or not to make a contribution to your Australian Superannuation Fund.
For anyone living in Australia, that could mean a salary sacrifice contribution for salary staff, or a personal contribution for contractors or self employed and a spouse contribution. Personal contributions can be made at any time if you are under age 65. However, if you are between aged 65 to 74, personal contributions can only be made if you meet the work test before the contribution is made.
(A person meets the work test if they have been gainfully employed for at least 40 hours in a period of not more than 30 consecutive days in that financial year). Personal contributions cannot be made where a person is aged 75 or over.
You should also be mindful of the maximum tax deductible limits, which are A$25,000 per year including any Employer contributions, so you might not want to make an over contribution that would not give you any tax relief.
For taxpayers living overseas, you can only claim a tax deduction on Superannuation contributions if you have taxable income. If abroad, this is most likely only if your property is generating more rental income than expenses. If this is the case then a contribution equivalent to the taxable income could mean a tax rate of just 15% in the Super fund rather than the 32.5% income tax rate (subject to Div 293 rules).
It is strongly recommended you get some advice before committing to any additional contribution to ensure you get the most effective position, as if you are already at the concessional limit or don’t have any taxable income you will not get any actual tax benefit from contributing and may find funds locked away until at least 60 years old.
Our SMATS Wealth Authorised Representatives and tax team can assist you in deciding what options will work best for you.
For more information or assistance register online at http://www.smats.net/wealth/
