End of year looms for super tax planning

By Paul Trimble

With the end of the financial year looming, now’s is the time to implement your superannuation strategies before the 30 June deadline.

Here are a few things to consider for your super as we head towards 30 June 2013.

If you have a self managed super fund (SMSF), off-market transfers will be off limits from 1 July. Therefore, if you want to transfer a listed share into your SMSF do it before 30 June. Otherwise, you could be up for brokerage and other costs.

With the reduction in concessional contribution caps to $25,000 for those over 50, which took effect from 1 July 2012, you may need to act before 30 June to ensure you haven’t exceeded the cap. Otherwise, you could be liable for excess contributions tax.

If eligible, take advantage of the government co-contribution by making a non-concessional (after tax) super contribution before 30 June. For every dollar of eligible contributions, the government contributes 50 cents to your super up to $500. For 2012/13, the maximum co-contribution is payable for those on incomes at or below $31,920 and reduces by 3.33 cents for each dollar above this. The co-contribution cuts out once your total annual income exceeds $46,920.

If you intend claiming a tax deduction for your super contributions, make sure you’re eligible to claim the deduction. Get advice from your Westlawn Business Services Accountant if you’re unsure. And remember, keep all relevant paperwork to ensure eligible deductions can be claimed.

Make your super contributions count this financial year

This year, 30 June falls on a Sunday. The ATO advises that to ensure a contribution counts for a financial year, it’s safer to contribute well in advance of 30 June.

As a general rule, a contribution will be made to a superannuation fund or SMSF when the funds are received by the super fund.

For cash payments to super (either in Australian or foreign currency), the contribution is made when the cash is received by the fund.

For electronic fund transfers (EFTs) to the super fund, the contribution is made when the funds are credited to the super fund’s account.

For payments made by a money order or bank cheque, the contribution is made when the money order or bank cheque is received by the super fund (unless the order or cheque is dishonoured, where no contribution is deemed to have been made).

For personal cheques (other than post-dated cheques) presented and honoured with cash or its electronic equivalent, the contribution is made when the personal cheque is received by the super fund, so long as the cheque is promptly presented and is honoured.

For post-dated personal cheques presented and honoured with cash or its electronic equivalent, the contribution is made when the cheque can be presented for the payment (the date on the cheque), so long as the cheque is promptly presented and is honoured.

Copyright © 2013

Disclaimer

Westlawn provides this information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers.

Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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