The end of financial year always seems to arrive in a hurry!
We hope our summary of strategies will help you to consider your end of financial year opportunities. Not all of these will be suitable to everyone, please ensure you seek advice from us or your tax professional before acting on any of the below:
Maximising concessional contributions
This year the concessional cap (pre tax earnings) has INCREASED to $27,500. This cap includes your employer contributions, salary sacrifice and in some cases insurance premiums. To maximise your concessional cap you may be able to make a personal contribution to super and if you have sufficient assessable income, claim a tax deduction. To check your available cap balance you can log into your Mygov, review your payslips or get in touch with us.
Maximise non concessional contributions
This year the non concessional (after tax earnings) cap has INCREASED to $110,000. Non concessional contributions are great for those trying to build their super balance; ensure they can minimise tax payable on their super death benefit if paid to an adult child; equalise super balances between spouses. To see if this strategy is appropriate for you, always seek advice.
Make spouse contributions
If your spouse has assessable income of $37,000 or less, by making a contribution of $3,000 to their super you may be eligible for a tax offset of $540. Rules apply and some super funds may not accept these contributions.
If your income is below $41,112 and between $56,112 (and atleast 10% is earned from employment) then you may contribute $1,000 to your super and the government will also pay $500 to your super.
Accessing Bring Forward Non Concessional cap
In 21-22 financial year, you are required to be under 67 on 1 July 2021 to be able to access the bring forward cap in this financial year. From 2022 onwards you can be under the age 75. This strategy has some complications so please seek advice if you are looking at using the bring forward rule.
If you are in Pension phase (draw down/retirement) then remember that you need to take a minimum pension payment before June 30. Note that the 50% reduction in minimums applies to this current financial year as well as next financial year.
Super beneficiary nominations
The end of financial year is always a good time to review your beneficiary nomination as some funds will have nominations that lapse every 3 years. If you have experienced separation or even updated your Will, ensure your super beneficiary nomination is up to date.
Remember that many super funds have cut off processing dates well before 30 June so please don’t leave it till the last minute.