Deductions for contributions flagged as ‘big tax planning tool’
With 30 June fast approaching, SMSF clients may want to take advantage of the new rules for claiming tax deductions for personal superannuation contributions, says HLB Mann Judd.
Speaking at HLB Mann Judd event in Sydney, HLB Mann Judd wealth partner Jonathan Philpot said superannuation will become a “far bigger tax planning tool” this year now that the rules have been changed and PAYG earners can now contribute a personal super contribution and claim that as tax deduction.
Maximising super earlier will also become important, said Mr Philpot, now that concessional contribution limits have been reduced down to $25,000.
“For those with income levels above $87,000 and in the 39 per cent tax bracket, including Medicare levy, the tax benefit of the contribution is 24 per cent, but the individual personally receives the 39 per cent benefit,” he said.
For clients with mortgages, who have paid off more than 50 per cent of the home value, Mr Philpot said they may want to start considering other strategies including superannuation.
HLB Mann Judd partner Peter Bembrick said with negatively geared loans not providing as much of a loss with the lower interest rates, and a question mark over the viability of other strategies such as agriculture tax schemes, it is difficult to claim large tax deductions elsewhere.
He noted it is important to make sure contributions are sent to the superannuation fund well before 30 June, as the contribution is dated from when the fund receives it, not when it is sent.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.