End of Financial Year superannuation tax strategies

As we approach the end of the financial year, there are a number of smart strategies you could consider to help you make the most of your super and minimise your tax liability.

Personal deductible contributions

Contributing to your super can be one of the most tax-effective ways of building your retirement savings. However, since the reduction of the concessional contribution caps, you will need to be extra careful not to exceed the limit and incur hefty excess tax.

If you currently have a salary sacrifice or transition to retirement strategy in place, or are self-employed and make personal deductible super contributions, you should speak to Commonwealth Private Advisory to review your current strategy.

Under the changes for the 2009 -10 financial year, the concessional contribution cap for those aged under 50 has reduced from $50,000 pa to $25,000 pa (indexed). The transitional contributions cap (available to individuals aged 50) has been reduced from $100,000 pa to $50,000 pa (not indexed). These limits are summarised below;

Concessional contribution caps

* Indexed from 1 July 2010 ** Not Indexed

Super contributions and the self-employed

If you are self-employed, substantially self-employed or an unsupported person, you can make contributions to your super and claim a full tax deduction. Note that if you do not claim your super contributions as a tax deduction, they will be regarded as non-concessional (after-tax) contributions.

To be considered substantially self-employed for tax purposes, no more than 10% of your total assessable income for the income year (which includes reportable fringe benefits and reportable employer superannuation contributions for that year) must be attributable to employment.

An unsupported person is one who does not receive any superannuation from assessable income they earn in an income year. An example would be a retiree who is eligible to contribute to super but only receives passive income from investments.

To find out more about superannuation taxation strategies or other services offered by Commonwealth Private, please contact:

SA/NT: Steve Crescitelli on 08 8104 5757 or steven.crescitelli@cba.com.au

QLD: Anthony Pupovac on 07 3237 3792

VIC: MalissaTobias on 03 9675 7135

WA: Clint McNally on  08 9482 6240

NSW: Damien Rayner on 02 8292 5450

^{Important information}

^{This article is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy any securities or financial instruments. This article has been prepared without taking account of the objectives, financial situation and capacity to bear loss, knowledge, experience or needs of any specific person who may receive this report. All recipients should, before acting on the information in this article, consider the appropriateness and suitability of the information, having regard to their own objectives, financial situation and needs, and, if necessary seek the appropriate professional or financial advice regarding the content of this article. Steve Crescitelli is an authorised representative of Commonwealth Private Limited AFSL 314018 ABN 30 125 238 039.}