Non-concessional superannuation contributions
The non-concessional superannuation contribution amounts have changed this financial year. The amount you can now contribute to your superannuation account has reduced to $100,000 per financial year. You have the ability to bring forward the contributions for three years. This can be done in one lump sum contribution. The cut-off date for such contributions is 30 June 2018.
Let’s say you receive a windfall of cash from an inheritance or sale of an asset. You can bring forward up to three years of non-concessional contributions. These contributions cannot exceed $300,000 in one lump sum. You do not have to pay any contribution tax on such contributions. Income generated within your Super is taxed at a maximum rate of 15%. The tax could be significantly less than funds invested elsewhere. Tax rates for funds invested outside Super would be dependent on your marginal tax rate.
Limitations on non-concessional superannuation contributions
There are some limitations on how much you can contribute. Limitations are dependent on:
- your total Super balance
- what you have already contributed in the past few years, and
- your age
IMPORTANT – Contributions cannot be taken out of your Super account until you meet the conditions of release. For most people, the condition is retirement age.
Concessional superannuation contributions
You may be reluctant to salary sacrifice your Super because of cash flow needs. This financial year you can reduce your income tax, by maximising your concessional contributions.
Whether you are an employee or self-employed and under 65 years, you still have the opportunity to make a concessional contribution up to $25,000. If you do so before 30 June 2018, you only pay 15% tax on this amount.
What are your retirement goals?
If you’re unsure whether you are eligible for these opportunities, speak to us before 30 June 2018. We can also give you more information on other superannuation tax breaks. Pacific Finance Australia can put you in touch with our in-house Financial Adviser – Luke Watson.
Luke is a qualified Financial Adviser with 10 plus years’ experience in the Investment Industry. He has an excellent understanding of Market Operations, Financial Planning, Life Insurance and Large Capital Investment. Luke can work with you to identify a long-term strategy to help you meet your retirement goals.
Contact your Pacific Finance Australia Broker today on 08 9321 2120 or send us an email at [email protected] for more information.