You've got to ask yourself one question: Do I feel lucky? Well, do ya, punk? David O Connell Senior Technical Consultant

Transcription

1 You've got to ask yourself one question: Do I feel lucky? Well, do ya, punk? David O Connell Senior Technical Consultant 1

2 Contribution caps increased 2013/ /15 General concessional cap $25,000 $30,000 Concessional cap if aged over 59 on 30 June of previous year Concessional cap if aged over 49 on 30 June of previous year $35,000 $35,000 $25,000 $35,000 Non-concessional cap $150,000 $180,000 Bring-forward non-concessional cap $450,000 $540,000 2

3 Concessional contributions A contribution must generally be allocated to a member s account by the 28th day of the month following the end of the month the contribution was made You are entitled to a deduction in the year it was made The contribution counts towards the cap for the year in which it was allocated 3

4 Other uses for delayed allocation If the member... the fund may accept... is under 65 Any contributions is over 65 but under 75 Superannuation Guarantee, or is over 75 If satisfies the work test, any contribution where received before the 28th day of the month following the end of the month they turn 75 Superannuation Guarantee 4

5 Excess concessional contributions Nicholas (45) received superannuation guarantee of $16K and made salary sacrifice contributions of $29K in the 2012/2013 financial year What will be the effect? 5

6 Excess concessional contributions Nicholas (45) received superannuation guarantee of $16K and made salary sacrifice contributions of $29K in the 2013/2014 financial year What will be the effect? 6

7 Excess concessional contributions Excess is now taxed at the member s marginal tax rate Excess concessional contributions (ECC) charge also levied (90 day BB + 3%) Option to leave the excess in super or take it out 7

8 Example Ryan Ryan on Marginal Tax Rate of 38.5% $20,000 excess concessional Tax liability $7,700 Less (credit) $3,000 (15% contribution tax) Tax payable $4,700 + interest 8

9 Ryan s option 1 leave it there Super fund deducts 15% as normal Ryan received excess contributions notice from ATO Ryan has only 21 days to pay the $4,700 plus interest Excess treated as non - concessional 9

10 Ryan s option 2 take it out Super fund deducts 15% as normal Ryan received excess contributions notice from ATO Ryan has 21 days to send election to release form to ATO ATO sends release authority to super fund Super fund pays $17,000 to ATO ATO deducts remaining tax liability ($4,700 + interest) ATO remits the balance back to Ryan Excess not treated as a contribution 10

11 Concessional contributions high income earners Sabrina is self employed and has taxable income of $295,000. She made a personable deductible contribution of $25,000 in 2012/2013. What is the effect? 11

12 Concessional contributions notice issues James is a sole trader and makes contributions to his public offer fund throughout the 2012/2013 financial year. He claims a deduction for $25,000 of those contributions but doesn t send the fund a completed copy of the ATO s notice What is the effect? 12

13 Concessional contributions notice issues Jenny is a sole trader and makes personal deductible contributions of $25,000 to her public offer fund throughout the 2012/2013 financial year. She claims a deduction for those contributions, however her business deductions exceeds her business income and she doesn t have any taxable income. What is the effect? 13

14 Concessional contributions notice issues Marissa is a sole trader and makes personal non-concessional contributions to her public offer fund throughout the 2012/2013 financial year In August 2013, she rolls over some of her benefits to her SMSF In September 2013, she completes her notice and lodges her tax return What is the effect? 14

15 Maximise personal contributions Personal contributions capped at $150,000 pa If under 65 you can bring forward 2 years of cap and contribute up to $450,000 $150,000 $180,000 $180,000 $180,000 $180, June June June June June 2017 $450,000 $0 $0 $540,000 $0 15

16 Maximise personal contributions What counts towards the nonconcessional contribution cap? Beware of issues around CGT cap contributions 16

17 Maximise personal contributions Joan turns 65 on 1 June She currently has $200,000 cash. She is expecting another $250,000 between now and September How much can she contribute as a non-concessional contribution: In May 2014? In June 2014? In September 2014? 17

18 What is a contribution? Jane pays her SMSF s accounting and auditing fees from her personal bank account and doesn t get reimbursed from the fund What s the effect? 18

19 What is a contribution? Jasmine is a chartered accountant and prepares her SMSF s accounts and income tax return for her fund. She doesn t raise an invoice What s the effect? 19

20 What is a contribution? Gus and Pina are the shareholders of an accounting firm which completes their SMSF s accounts and tax return An invoice is raised but as shareholders, they have the invoice forgiven What s the effect? 20

21 What is a contribution? Tom enters into a contract, via a holding trust to purchase a property for his SMSF under an LRBA. However, the bank refuses financing and Tom sources the funds from family members No loan documentation has been put in place What s the effect? 21

22 Disclaimer This information was prepared by Securitor Financial Group Ltd, ABN AFSL & Australian Credit Licence (ACL) (Securitor) and is current at time of publication. Material contained in this presentation is an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. All case studies and examples used in this presentation are for illustrative purposes only and nothing in this presentation should be construed as an indication or prediction of future performance or results. 22