End of Financial Year Tax Planning Tips – Superannuation

  • The concessional contributions cap was reduced to $25,000 for everyone from 1 July 2017. From 1 July 2018, individuals with a total superannuation balance of less than $500,000 at the end of a financial year will be allowed to make additional concessional contributions in the next financial year by accessing unused concessional contribution cap amounts carried forward from the previous five years.
    Although the measures start from 1 July 2018, in practice, only unused amounts of the concessional cap from the 2018/19 and later years can be carried forward.
  • From 1 July 2017, the annual non-concessional contributions cap was reduced from $180,000 to $100,000, subject to satisfying the super balance cap of $1.6m.
  • From 1 July 2017 the requirement that an individual must earn less than 10% of their income from their employment related activities to be able to deduct a personal contribution to superannuation was removed. All individuals under the age of 65, and those aged 65 to 74 who meet the work test, may claim a tax deduction for personal contributions to eligible superannuation funds up to the concessional contributions cap.
  • You will be subject to the 15% surcharge on concessional super contributions in 2018 and subsequent years if your adjusted income (i.e. after deductions are added back) is $250,000 (down from $300,000 in prior years). This results in an effective 30% rate on your concessional super contribution, which is still likely to be lower than your marginal personal income tax rate (up to 47%, including Medicare levy).
  • From 1 July 2018, a person aged 65 or over can contribute up to $300,000 from the proceeds of the sale of their home as a non-concessional superannuation contribution into superannuation (accumulation account), if they have owned it for at least 10 years.

If you have any questions, please do not hesitate to contact Heather Moore on (08) 9254 6854.

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