With June 30 approaching, now is the perfect time to ensure your superannuation strategies are up to date.
Before the end of the financial year you should:
Review if you have any income available to contribute to your fund; and
Review your total contributions to ensure they are below the caps.
Non-concessional (after tax) contributions are limited to $100,000 for the 2019 financial year and concessional (before tax) contributions are limited to $25,000.
Members under 65 years of age have the option of contributing up to $300,000 over a three-period depending on their total super balance. Transitional arrangements also apply to individuals who brought forward 17-18 financial years.
Anyone making large superannuation contributions should exercise extreme care to avoid excess contribution penalties. Making sure you do not exceed the contribution caps will save you both money and time of dealing with excess contribution tax.
Contributions are included in a financial year if they are received by your fund during that year. This means that they must be in the SMSF’s bank account by 30 June. With 30 June falling on a Sunday this year, it would be prudent to make your contributions by Wednesday 26 June to ensure they are received by your fund prior to the end of the financial year.
Drawing superannuation pensions
If you are in pension phase, you need to ensure the minimum pension has been paid to you for this financial year. Where these requirements have not been met your fund will be subject to 15% tax on your pension investments, rather than being tax free.
Personal superannuation contributions
From the 2017-2018 and future financial years, most people regardless of their employment arrangement, will be able to claim a deduction for personal super contributions they make to their fund until they turn 75.
Individuals who are aged between 65 and 75 will need to meet the work test to be eligible to claim the deduction.
If you wish to claim a tax deduction for personal contributions, you must complete and lodge a notice of intent with your fund before June 30 and have this notice acknowledged (in writing) by your fund. Any contribution also needs to be received by your fund before June 30.
If you meet the relevant work tests and earn less than $52,697, it is also worth considering if you can take advantage of the Government super co-contribution.
SMSF fund expenses
For members in the accumulation phase, it is important that any expenses are actually incurred or paid before 30 June to be deductible in the current financial year.
Rebalancing accounts between spouses
The end of financial year is also the perfect opportunity to rebalance pension accounts between spouses, to ensure that super balances are as even as possible and the $1.6 million transfer balance cap is maximised for each member.
How can we help?
If you need assistance with any aspect of your end of year fund planning or reporting requirements, please feel free to give me a call on 02 – 4455 5333 to arrange a time to meet so that we can discuss your circumstances in more detail.