Strategy Matters

Concessional Cap Breach

Excess Concessional Contributions From 1 July 2013, individuals who exceed their concessional contributions cap will have the excess amount included in their assessable income, and taxed at their marginal tax rate, plus an interest charge which will be calculated similarly to the earnings amount for a non concessional contribution. The individual may choose to release up to 85%...

Reserves

Reserves are accounts that have not been allocated to any particular member. Reserves are taxed in the same manner as accumulation accounts. There are two major types of reserves: Contribution reserves All other reserves Contribution Reserves A contribution reserve is, arguably, merely a suspense account as it holds contributions for a short time before they are allocated to...

Registering a New Fund

Anyone, including self-managed super funds, can apply for an Australian business number (ABN), but not everyone is entitled to get one. If your SMSF is not entitled to an ABN your application will be refused. Registering an SMSF An SMSF cannot be registered if no assets are held. If you expect to receive a rollover, transfer or contributions in...

Overseas Residency

If a Fund is deemed to be a non-resident Fund the ATO are compelled to make it non-complying and to invoke the top personal tax rate on as much as the whole Fund so this is a very important consideration. It is also one where there can be some uncertainty as to what constitutes residency so...

Lump Sum Disability Tax

If a member receives a superannuation lump sum payment due to disability they may be eligible for a reduction in any lump sum tax that would otherwise be payable under Section 307-145 of the ITAA. This is because the tax free component of the benefit may be increased by an amount calculated in accordance with the...

Future Service Benefit

Section 295-470 of the ITAA (Future Service Benefit), further explained in ATO ID 2015/17, allows a Fund to claim a deduction on the payment of: a superannuation death benefit; or a terminal illness benefit a disability superannuation benefit or a temporary incapacity income stream. The deduction, also known as the Future Liability deduction, is available irrespective of...

Death Benefit Nominations

Superannuation benefits are not subject to the provisions of the member's Will unless the benefits are paid into the Estate. There may be various reasons why this may not be the best course of action including the relative vulnerability of the Estate to claims from other parties the deceased may not have intended to benefit. SMSF members...

Death and Taxes

There are two broad tax considerations on death - tax in the Fund and tax to the beneficiaries. Within the Fund there may be no material tax changes if there is a reversionary pension beneficiary or another beneficiary who can receive a pension but, if that is not the case, then the member account will become...

Contributions

Contribution caps limit the amount that may be contributed as tax deductible (Concessional) or non-deductible (Non-Concessional) contributions. Concessional Contribution Caps Financial Year Age Cap 12/13 To age 75 $25,000 13/14 58 or under @ 30/6/13 59 or over @ 30/6/13 $25,000 $35,000 14/15 48 or under @ 30/6/14 49 or over @ 30/6/14 $30,000 $35,000 15/16 48 or under @ 30/6/15 49 or over @ 30/6/15 $30,000 $35,000 16/17 48 or under @ 30/6/16 49 or over @ 30/6/16 $30,000 $35,000 17/18 & 18/19 To...

Non-Concessional Cap Breach

Non Concessional Contributions Since 1 July 2013, an individual who has made non-concessional contributions in excess of their cap can elect to release an amount equal to those excess contributions plus an associated earnings amount from super, with the associated earnings amount being included in the individual’s personal assessable income. Excess non-concessional contributions tax will be avoided if...