HSBC Australia head of wealth Scott Ellis says if one spouse has over $1.6 million and the other is under the cap, the spouse with the higher balance may want to consider withdrawing the excess and putting it into the other’s account.
“This will allow them to maximise the total amount, up to $3.2 million, that can be invested tax free,” Mr Ellis said.
“Similarly, singles whose pension account balance is over the new cap could consider withdrawing the excess funds in one lump sum and investing the capital elsewhere or back into an accumulation account before 30 June.”
HSBC said practitioners may also want to consider how their clients can restructure assets within a family to maximise eligibility for the age pension.
If a younger spouse is under the pension age, the other spouse could consider putting excess funds into the younger spouse’s superannuation account or alternatively withdrawing the excess funds to invest or spend elsewhere, HSBC said.
“For example, consider spending a portion of your excess funds on renovating your home now rather than in retirement or arranging a prepaid.”
Good grief!
(A) the tax planning is so obvious and basic and
(B) there is such a thing still left as natural love and affection as an objective explanation to negate Part IVA. Most men still love their wives – and vice versa.
Dr Terry Dwyer
Dwyer Lawyers
If the sole or dominant purpose of doing something is to avoid tax then partVA can apply. There have already been warnings from lawyers that a spouse drawing down and recontributing for their partner in order to avoid tax that would otherwise be payable if they did not do so could be subject to part VA unless there are other material reasons for the change in addition to the potential tax saving.