End-of-year super superannuation strategy checklist

Get your superannuation into its best tax position, for this year-end and into 2012-13 and beyond. Consult your tax agent on which strategies suit you best.

Maximise after-tax contributions

Double-check your non-concessional (after-tax) contribution figures to make sure contributions are made up to the allowable cap before the end of the 2011-12 financial year. Generally, unused cap amounts are not carried over to future financial years.

Consider salary sacrificing

If you are over 50, consider salary sacrificing because the $50,000 concessional contributions cap only applies until June 30, 2012. After that, it will be $25,000 for everyone. And if you are likely to receive a bonus, salary sacrifice
it into superannuation rather than receiving it as cash to take advantage of the larger concessional contributions cap in this financial year. However, don’t forget about excess contributions tax risks.

Put certain termination payments into super

Transitional termination payments can be directed into super by June 30, 2012 with amounts up to $1 million enjoying concessional tax treatment.

Using personal deductible contributions to offset a capital gain

If you satisfy super’s ‘10% rule’, you may be eligible to claim a deduction for your personal super contributions. A deduction could be used to possibly offset a capital gain from the sale of one or more assets. Personal deductible contributions are subject to the concessional contributions caps. For 2011-12 these caps are $25,000 and $50,000 for those aged over 50. Individuals over 65 will also need to meet the ‘gainful employment test’.

Get a super boost from the government

If your total income is less than $61,920 in 2011-12, and at least 10% is from employment or a business, a personal after-tax contribution may qualify you for a government co-contribution of up to $1,000. This will halve from July 1, 2012 so be sure to capitalise on the current rate.

Split super contributions with your spouse

Spouse earns less than $13,800 a year? Make an after-tax contribution for them of up to $3,000 and maybe qualify for a maximum tax offset of $540. This way, you can boost your spouse’s retirement savings and reduce your tax liability. Remember however, contributions caps apply to the spouse on whose behalf the contributions are made.

SMSFs: Keep within in-house asset rules

If your fund’s holding is more than the 5% limit on in-house assets, reduce it by June 30 this year.

SMSFs: Make insurance more affordable

Purchase life and total and permanent disability insurance via your SMSF to benefit from tax concessions.

SMSF in pension phase drawdowns

Make sure you have drawn down the required minimums by June 30, or the investment income derived from the assets supporting that pension may no longer be exempt from tax. If you’re almost 60 and want to cash out some of your super, consider waiting until over 60 to minimise potential lump sum tax.

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