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| Seek out the
correct advice on your Super By Mrs Heather Gill, Acting Director Superannuation Volume 49, No. 5, April 05, 2007 |
| SEEKING financial advice can help you make
the right decision for your future in regard to the changes in superannuation
laws to take effect on July 1. How those changes will affect post-tax (non-concessional) contributions are outlined below. From July 1, contributions made from post-tax income will be called non-concessional contributions, which will be capped and taxed as follows: - If you do not provide your Tax File Number, your fund will not be able to accept any non-concessional contributions. This will affect your retirement benefit. - Non-concessional contributions will be capped at $150,000 a year. This cap is the total of all non-concessional contributions you make to all your superannuation funds. - Non-concessional contributions are post-tax. You will not be taxed a second time when you pay them, provided you stay under the cap. - Any non-concessional contributions over the cap will be taxed at 46.5 per cent. This tax will be imposed on you. You will have no option but to withdraw an amount from your super fund equal to your tax liability. - A previous article explained that concessional (pre-tax) contributions will be capped at $50,000. - Concessional contributions over $50,000 will count towards the non-concessional cap. - The cap will apply to all non-concessional contributions made on behalf of an individual. Contributions made by one spouse for the benefit of the other will be counted against the receiving spouse’s cap. - To allow for larger contributions, members under 65 will be able to bring forward up to two years of non-concessional contributions. You can contribute up to $450,000 in the 2007-2008 financial year but will not be able to make further non-concessional contributions until the 2010-2011 financial year. These changes will affect all superannuation fund members. You can view a list of financial planners at the Financial Planning Association at www.fpa.asn.au, CPA Australia at www.cpaaustralia.com.au and the Institute of Chartered Accountants at www.icaa.com.au For more information, visit www.simplersuper.treasury.gov.au or www.fido.gov.au |