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The SMSF Professionals’ Association of Australia (SPAA) has outlined a number of strategies for accountants advising on SMSFs to ensure the best client outcomes this June 30.
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SPAA outlines EOFY strategies
13 June 2014
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Graeme Colley, SPAA’s director technical and professional standards, said various strategies are available, including making after-tax contributions, and, if aged 60 or above, using the higher tax deductible contributions or drawing down a lump sum.
Making after-tax contributions to super is one effective way to minimise tax, said Mr Colley.
"This financial year the maximum personal after-tax contribution is $150,000; however, if you are 65 or under you can contribute up to $450,000 over a three-year period,” he said.
"This allows you to make substantial contributions to super and build your retirement savings. But remember, while this is a real bonus, it's critical not to exceed the after-tax contributions caps because there can be tax penalties as high as 46.5 per cent.
"Remember, too, that from 1 July 2014, the after-tax contributions cap increases to $180,000. This means if you can trigger the bring-forward rule, a total of $540,000 can be contributed over the fixed three-year period," he said.
Mr Colley said it's important for anyone aged 60 and above to note the maximum tax deductible contribution cap is $35,000.
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"These contributions include amounts you make as salary sacrifice, the superannuation guarantee or, if you qualify, personal deductible contributions. If you want to maximise your contributions before 30 June, make sure you talk to your accountant, tax agent or professional adviser so your salary sacrifice agreement with your employer allows the maximum to be salary sacrificed," he said.
"If you are 65 or older you will need to meet a work test to contribute to super in most cases. You will need to work for at least 40 hours during 30 consecutive days at any time during the financial year to make tax deductible and non-deductible contributions to super."
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