ATO to issue guidance on tax loophole with early super release
The ATO is planning to issue guidance outlining the limited circumstances in which they will allow an individual to access their superannuation early and later claim a concessional contribution.
SMSF Adviser understands the ATO is currently preparing guidance on the limited circumstances when an individual will be allowed to access some of their superannuation early before making salary-sacrificed super contributions to lower their taxable income.
Individuals would have had to prove they met at least one of the eligibility requirements, including seeing a reduction in working hours by 20 per cent or more, or seeing a reduction in turnover of 20 per cent or more as a sole trader.
It is understood that the ATO will indicate that the number of circumstances where they are comfortable with someone dipping into their super and later claiming a concessional tax-deductible contribution will be very limited.
Temporary early access to super was one of several changes made to superannuation as a part of the government’s second stimulus package to offset the economic effects of the coronavirus outbreak.
APRA data published on Monday showed early super payments up to 7 June had totalled at $14.8 billion, with 1.98 million applications out of 2.12 million having been paid out.
According to the ATO, it has now approved 1.9 million applications for early release of super, totalling $16 billion from superannuation funds.
Eligible individuals could apply for an early release of up to $10,000 in the 2019–20 financial year through the myGov website since 20 April.
A second payment of up to $10,000 will be available from 1 July 2020, and members will have until 24 September to apply.