As well as threshold and tax changes, if you’re preparing to get stuck in to your tax return, it’s important you maximise your opportunities to increase your super savings before the end of the financial year.
Current contribution limits
Now is an important time to check the amount you have contributed to your super fund and meet the caps where possible.
The current caps are:
• concessional (before tax) contributions are limited to $25,000; and
• non-concessional (after tax) contributions are limited to $100,000 provided your total super balance was less than $1.6m on 30 June 2018
Members under 65 years of age have the option of contributing up to $300,000 as non-concessional contributions over a three-period depending on their total super balance. Transitional arrangements also apply to individuals who brought forward their non-concessional contribution caps in the 2016-17 and 2017 – 18 financial years.
If you wish to make a large superannuation contribution, you should contact us to avoid excess contributions – this will save you both money and time.
Timing of contributions – get them in by Wednesday 26 June 2019
As 30 June 2019 falls on a Sunday, it is important to ensure all contributions are made by Wednesday 26th June. They need to be received into your super fund’s bank account in time as contributions are counted in the year of receipt.
In particular, check if your June 2019 salary sacrifice contribution will be made in June or July 2019? If your June and/or any previous month’s salary sacrifice contribution will be paid into your fund in July 2019, this will be counted towards the 2019/20 concessional contribution cap of $25,000 (for all ages) and not the current year cap.
If you earn less than $52,697, it is also worth finding out if you can take advantage of the Government super co-contribution. To be eligible you will need to satisfy a work test, be under the age of 71, and have a super balance of less than $1.6million.
Downsizer contribution into superannuation
From 1 July 2018, if you are over the age of 65 and meet all the eligibility requirements, you may choose to make a downsizer contribution (a new contribution type) of up to $300,000 into superannuation from the proceeds of selling your home.
To be eligible, the contract for sale must have been entered into on or after 1 July 2018 and contributions should be made within 90 days of the change of ownership (usually the date of settlement). An extension of time may be granted where there is a delay but will not be granted to allow you to meet the age requirement.
Downsizer contributions can be made regardless of contributions caps and other restrictions (age and work test) that may apply when making voluntary contributions. If you make a downsizer contribution it is reported in the year it is made, and you will need to provide a Downsizer contribution into super form, either before or when you make the contribution.
Super Splitting / Re-balancing accounts between spouses
The end of financial year is also the perfect opportunity to re-balance accounts between spouses, to ensure that super balances are as even as possible and the $1.6 million transfer balance cap is maximised for each member. This can be done by way of super-splitting to your spouse’s super account, provided the eligibility criteria is met.
GET HELP FROM YOUR ADVISER
We are here to help you navigate your way through this very important time of year. Don’t hesitate to call your Treysta adviser to ensure that you’re on the right track.