End of Year Strategies for Superfund Members and Trustees

With 30th June fast approaching, now is the time to review your superannuation and pension strategy to ensure you maximise your family’s financial position whilst complying with the numerous rules and regulation.


Superannuation in accumulation phase

Maximise Concessional Contributions (CCs) the maximum that can be contributed as concessional (pre-tax) contributions is $25,000 this financial year. These are the superannuation guarantee and salary sacrifice contributions. If there is a shortfall, individuals can make up the difference and claim a tax deduction in their personal tax return. Self-employed people can also contribute up to $25,000 into their super and claim this full amount as a tax deduction.

Maximise Non-Concessional Contributions (NCCs) – in addition to the above, individuals can make after tax contributions (called NCCs) of up to a further $100,000 per year currently. Up to 3 years’ worth of these contributions can be made in a single contribution (that is up to $300,000) with a number of special rules applying. These contributions are restricted if the individual’s account balance already exceeds certain levels. This strategy may be appropriate for an individual who has sold other assets, sold a business or inherited money from an estate.

In certain circumstances, contributions can be made by way of the transfer of an existing asset rather than cash (for example, shares). Such contributions are a little trickier and getting proper advice would be a good idea.

Superannuation in pension phase

Making sure the minimum pension is paid – individuals who are being paid a pension from their fund or who started a pension during the financial year must ensure they have drawn out the minimum legally required pension payment for the financial year. It’s particularly important that SMSF members ensure that there is enough cash available to make these cash payments, so they don’t have to sell other assets.

The minimum pension amounts required to be paid each year vary based on the age of the pension recipient.

Failure to make the required minimum pension payment in the financial year will result in the member’s account losing its pension status and the associated tax benefits for that year.

A few other things to think about…

Investment strategy – the end of the financial year is a good time to review your fund’s asset allocation and specific investments strategy to ensure you are not taking any unintended risks with your money and are suitably protected against volatile markets.

Estate planning – if you have been putting off that conversation about what happens to your super and other estate assets when you pass away or your simply haven’t looked at your estate plans for a while, now is a great time to address this issue.

Labor’s tax and super proposals – with the polls pointing to the strong possibility of Labor federal election win this weekend, our March 2019 client newsletter outlined the key superannuation and tax changes the ALP propose to make. The impact will be significant and pervasive. With a number of the proposed changes due to commence from July 2019, these changes may materially impact your family’s financial strategy. It may make sense to seek further advice in the near term to determine what action may be required.

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This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax/or legal advice prior to acting on this information. Before acquiring a financial product a person should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product. The material contained in this document is based on information received in good faith from sources within the market, and on our understanding of legislation and Government press releases at the date of publication, which are believed to be reliable and accurate. Opinions constitute our judgment at the time of issue and are subject to change. Neither, the Licensee or any of the Oreana Group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Gordon Thoms and David Conte of Calibre Private Wealth Advisers are Authorised Representatives of Oreana Financial Services Limited ABN 91 607 515 122, an Australian Financial Services Licensee, Registered office at Level 7, 484 St Kilda Road, Melbourne, VIC 3004. This site is designed for Australian residents only. Nothing on this website is an offer or a solicitation of an offer to acquire any products or services, by any person or entity outside of Australia.

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