With the end of the financial year fast approaching, The SMSF Professionals’ Association of Australia has outlined some key tax-time strategies for trustees and their advisers.
SPAA director technical and professional standards Graeme Colley said there are various strategies to get the best outcome at 30 June, including making after-tax contributions, and, if aged 60 or above, using the higher tax deductible contributions or drawing down a lump sum.
“Making after-tax contributions to super, which could come from your personal savings, transferring personal investments or an inheritance, is one effective way to minimise tax,” he said.
“This financial year the maximum personal after-tax contribution is $150,000; however, if you are 65 or under you can contribute up to $450,000 over a three-year period,” he added.
Mr Colley said this allows trustees to make substantial contributions to build their retirement savings.
“But remember, while this is a real bonus, it’s critical not to exceed the after-tax contributions caps because there can be tax penalties as high as 46.5 per cent,” he explained.
Mr Colley also said it’s important for anyone aged 60 and above to note that the maximum tax deductible contribution cap is $35,000.
“These contributions include amounts you make as salary sacrifice, the Superannuation Guarantee or, if you qualify, personal deductible contributions,” he added.
Mr Colley warned trustees not to forget that once you reach 60, all lump sums from all superannuation funds, with some exceptions for government funds, are tax free.
“However, before age 60 any lump sums that include a taxable component can be taxable,” he said.
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