Make the most of your self-managed super fund by preparing for the end of financial year with these tips:
1. Remember, there’s no ban on off-market transfers
In May, the government decided to scrap its proposed ban on off-market transfers, which was set to take place on July 1.
Rivkin Super manager Charity Bru says “in specie” share contributions continue to exist.
“From July 1 if you have shares you want to contribute directly to your super fund you are free to do so,” she says.
SMSF Professionals’ Association of Australia’s Graeme Colley says if you are considering transferring shares as an “in specie” or non-cash transfer make sure you don’t exceed contribution caps. It’s also important to confirm the acquisition of the listed securities is consistent with your fund’s investment strategy.
Colley says it’s important to keep in mind the change to the law, which occurred on July 1, 2012, that states all records for the fund and reporting relating to the fund must be kept on a market value.
2. Take advantage of co-contribution
If you have earned under $31,920 this financial year you may be eligible for the super co-contribution, where the government matches 50 cents for every dollar of non-concessional super contributions made for up to $500.
The $500 amount is scaled down when earnings are between $31,920 and $46,920. If you earn more than $46,920 you are not eligible for this scheme.
To estimate your super co-contribution entitlement and eligibility use the ATO’s co-contribution calculator.
3. Make the most of contribution limits
Concessional contributions are employer contributions, including those made under a salary sacrifice arrangement or, for people who are self-employed, personal contributions claimed as a tax deduction. The limit for concessional contributions is $25,000 per person, while the non-concessional limit is $150,000 per person.
Colley says if you’re under 65 you can make a non-concessional contribution of up to $450,000 over a three-year period.
If you’re older than 50, remember, the concessional contribution has been reduced to $25,000.
Colley says over 50s may need to take action before the end of the financial year to make sure the cap is not exceeded to avoid being hit with an excess contributions tax.
From July 1, the amount goes to $35,000 for anyone who is 60 or over, if you turn 60 during the 2014 financial year.
Bru says if you haven’t yet reached your limit, top up in June before it’s too late.
“Do that extra salary sacrifice if you can. The limits are ‘use them or lose them’ – you can’t carry forward the unused portion from year to year,” she says.
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