1. It's all about timing! First thing to note is that 30 June 2014 falls on a Monday so be very careful about doing anything for your fund after 28 June as funds transferred from Friday 28th risk not reaching the destination account before the deadline. Remember it is when the funds are received by the superannuation fund that counts.
2. Review Your Concessional Contributions – $25K under 59 and $35K otherwise (work test applies for 65+) Maximise contributions up to concessional contribution cap but do not exceed your Concession Limit. The sting has been taken out of Excess contributions tax but you don't need additional paperwork to sort out the problem. So check employer contributions on normal pay and bonuses, salary sacrifice and premiums for insurance in super as they may all be included in the limit.
3. Off Market Share Transfers (selling shares from your own name to your fund) The proposed ban on Off-Market transfer of shares into a SMSF never got through. If you want to move any shareholdings into super you should still act early. Please contact GJB for the forms if you need them.
4. Pension Payments If you are in pension phase, ensure the minimum percentage has been withdrawn. For transition to retirement pensions, ensure you have not taken more than 10% of your opening account balance this financial year. If you don't take the minimum pension from your super fund, then you risk your pension fund being stripped of the tax benefits of being a pension fund.
5. Spouse Contribution You can make a contribution for a low-earning spouse and receive a special tax rebate for doing so. If your spouse earns less than $13,800, then the higher earning spouse can make a contribution of up to $3,000 to the lower earning spouse's super account and generate a rebate of up to $540. To get the full $540 rebate, the receiving spouse must earn less than $10,800 and the contribution must be at least $3,000. It reduces from there until an income of $13,800 is reached, above which no rebate is payable. Check the ATO guidance here.
6. $500 Government Co-Contribution The government giveaway is not what it used to be, but it's still worth taking if suits your situation. If you earn less than $33,516 and make a non-concessional contribution, the government will meet your contribution at 50 cents in the dollar up to $1,000. That is, if you put in $750 the government will offer a bonus of $375. The contribution starts to run out above $33,516. For every dollar over that, the potential benefit drops by 3.33 cents up to the maximum of $48,516. You also have to meet work tests. If you are 65 or over, you must have worked 40 hours in a 30-day period. And everyone must meet the work test of earning 10% of their income from either employment or self-employment. You must also be under 71 at the end of the financial year in which the contribution is made.
There are many SMSF initiatives that will have relevance to a wide variety of our clients, depending on your circumstances. As always, please feel free to talk with us for further details and information on 02 9686 3130.
Disclaimer: All information provided in this newsletter is of a general nature only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.