NEW OPPORTUNITY TO BUILD WEALTH
The 1 July 2017 super reforms have opened up a fantastic new opportunity to build wealth in super and reduce your tax bill at the same time. That is, it’s now easier to claim a tax deduction on your personal super contributions than ever before.
Before 1 July 2017, the only way most people could take advantage of the concessional (before-tax) contributions tax benefits was by salary sacrificing through their employer. Some people, such as the self-employed, could make voluntary personal contributions to super and claim a tax deduction but, most people were simply ineligible.
Now, anyone1, not just the self-employed, can make voluntary personal contributions to super and claim a tax deduction.
This gives you more flexibility if your employer isn’t in a position to arrange salary sacrifice for you — such as a small business owner who doesn’t have the time to provide this service to their employees.
As an employee, you rarely have control on the timing of the salary sacrifice contributions made by your employer. This gives you that control so, for instance, you can time your final contributions leading up to 30 June each year and make the most of your contribution limits and the resulting tax benefits.
To claim a tax deduction on your super contributions make sure you:
> Check the age restrictions to make sure you’re eligible. There is a work test if you are age 65 to 75.
> Lodge a ‘notice of intent to claim a deduction’ to your super fund within the timeframes.
This change represents an opportunity for everyone, including those who are currently salary sacrificing, to gain greater control of their personal super contributions.
1 Note: Fund and age restrictions apply.