June 2015 Edition

In this edition:

Welcome

Business Taxpayers

Company Considerations

Trust Considerations

SMSF and Superannuation

SMSF and Superannuation

Preparing for the end of the financial year

Contributing to Super
Individuals who wish to take advantage of the concessionally taxed superannuation environment by salary sacrificing and growing their super balance should keep track of their contributions made during the year to make sure that they stay under the relevant contributions caps. During the 2015 financial year the contribution caps were: 

• Non-concessional contribution cap $180,000 (or 3 year bring forward of $540,000 for individuals under 65 
• General concessional contribution cap $30,000 
• Concessional contribution cap for those aged over 49 on 1 July 2014 $35,000
   

From 1 July 2013, excess concessional contributions tax has been abolished. Instead, excess concessional contributions are included in an individual's assessable income (and subject to an interest charge).

From 1 July 2013, excess non-concessional contributions tax continues to apply where relevant, unless the option to withdraw excess contributions is exercised. Associated earnings will be included in the individual's assessable income (subject to a 15% tax offset). Individuals with salary-sacrifice superannuation arrangements may want to have early discussions with their employers to help ensure contributions are allocated to the correct financial year.

From 2012–2013, individuals earning above $300,000 are subject to an additional 15% tax on concessional contributions. However, despite the extra 15% tax, there is still an effective tax concession of 15% (ie the top marginal rate less 30%) on their contributions up to the relevant cap.

Considerations for SMSF Trustees

1. Valuation: The assets in your SMSF must be valued each financial year based on objective and supportive data.
2. Contributions: Ensure contributions are received on or before 30 June, especially if made by electronic funds transfer. A day too late could cause problems. 
3. Tax deduction on your personal contributions: If you are eligible to claim a tax deduction then you will need to lodge a 'Notice of intention to claim a tax deduction' with your SMSF trustee before you lodge your personal income tax return. Your SMSF trustee must also provide you with an acknowledgement of your intention to claim the deduction. 
4. Spouse contributions: Spouse contributions must be received on or before 30 June in order for you to claim a tax offset on your contributions. The maximum tax offset claimable is 18% of non-concessional contributions of up to $3,000. Your spouse's income must be $10,800 or less in a financial year. The tax offset decreases as your spouse's income exceeds $10,800 and cuts off when their income is $13,800 or more. 
5. Contribution splitting: The maximum amount that can be split for a financial year is 85% of concessional contributions up to the concessional contributions cap. You must make the split in the financial year immediately after the one in which your contributions were made. This means you can split concessional contributions made during the 2013/2014 financial year in the 2014/2015 financial year. You can only split contributions you have made in the current financial year if your entire benefit is being withdrawn from your SMSF before 30 June 2015 as a rollover, transfer, lump sum benefit or a combination of these. 
6. Minimum pension payment: Ensure that the minimum pension amount is paid by your SMSF by 30 June 2015 in order to receive the tax exemption. If you are accessing a pension under the 'Transition to Retirement', then ensure you do not exceed the maximum limit also.

If you have any questions about preparing your superannuation or SMSF for the end of the financial year, please contact the team at Goodwin Chivas & Co.