With 30 June 2016 just a few weeks away there are 3 SUPER things you need to consider before then:
1. Make concessional contributions to receive a maximum tax deduction;
2. Pay the minimum pension. This ensures your fund’s income is tax free;
3. Check your NCC cap before making further non concessional contributions.
Concessional Contributions
The Concessional Contribution Caps for the year ended 30 June 2016 are as follows:
• For members aged 49 or below on 1 July 2015 the cap is $30,000; and
• For members aged 50 or more on 1 July 2015, the cap is $35,000.
Concessional contributions include Superannuation Guarantee Contributions (SGC) employer contributions, salary sacrifice and all contributions for which a deduction is claimed.
Members between 65 and 74 years of age must meet the work test before a contribution is made. This test requires 40 hours of gainful employment in a continuous 30 day period.
If you are claiming a concessional member contribution, any employment income must be less than 10% of total income.
Depending on the election outcome, this may be the second last chance for many to put more than $25,000 into super so clients should make the most of this opportunity including the opportunity to split contributions.
Beware – to be counted towards your 2016 Cap the contribution must be paid into your fund by 30 June 2016. If you are making a contribution by Internet Bank Transfer the contribution will be made when the money is received into the Fund’s bank account. As some transfers take a few days please ensure you take this into account when making your contribution. Contributions by cheque must be banked promptly ie day or two after received. If a third party is making your contributions it is wise to check when the contributions are paid to avoid any inadvertent breach of the cap.
Pension Payments
If your Fund is paying you a pension, eg Account Based Retirement Pension or a Transition to Retirement Income Stream, the payment must be made before 30 June 2016. This will ensure that the income from the assets supporting the pension is tax free.
Again beware – any payment must be made by 30 June 2016. Internet transfers can take a few days so please ensure that you take this into account when making the payment and bank any cheque promptly.
Non concessional contributions
The life time cap limit of $500K was the only superannuation measure introduced in the Budget which has immediate effect.
If you are considering making further non concessional contributions before 30 June 2016 please contact your Rosenfeld Kant Accountant to confirm your remaining contribution cap.
Other
All other superannuation measures announced in the Budget will only come into effect from 1 July 2017 and remain subject to the election outcome and resulting legislation. There will be time to seek advice and potentially rearrange your affairs between Election Day and 30 June 2017. We will be in touch as the environment develops.