End of Financial Year Survival Strategies

It’s incredible to think we’re in the last couple of months of the 2017/18 financial year. We’re at the stage where we’re starting to think about everything we need to finish before the end of June, and starting to plan our move into the next financial year. So, this year, let’s not leave it all until the last week! Let’s get started on our EOFY planning.

Superannuation

Firstly, let’s make the most of our superannuation contribution caps. For most people, super is a tax effective way to save for retirement. There are a couple of different ways you are able to contribute to super.

If you are under age 65, you are able to contribute $100,000 per year in after tax money into your super. If you choose to, you are able to ‘bring forward’ three years of contributions and make a contribution up to $300,000. However, it’s important to note, if you make a $300,000 after tax contribution to super this year, you will not be able to make any other after tax contributions until the 2020/21 financial year. Another benefit of this strategy is, if you earn less than $51,812, you could be eligible to receive the government co-contribution, which provides a maximum of $500 into your super.

It’s important to remember the concessional contribution (pre-tax) cap has been reduced to $25,000 per year for everyone. This cap includes the mandated 9.5% super contributions your employer makes to your account as well as any salary sacrifice contributions you’re currently making. If you haven’t reached your $25,000 cap and would like to maximise these contributions, you have the option of making a one-off lump sum contribution into your account, and then claiming a tax deduction. If you choose to contribute in this way, you are required to complete a valid ‘Notice of Intention’ to claim a tax deduction, and lodge this with your super fund, prior to completing your tax return.

Pension

If you continue to hold a Transition to Retirement (TTR) pension, it’s important to review this strategy. Due to legislation started on 1 July 2017 a TTR pension no longer has a tax exempt status. This means all earnings in the fund are taxed at 15%, the same as if they are in accumulation.

For those clients who run a Self Managed Superannuation Fund, it is vital to review your pension drawdowns for his financial year. Are you aware of your minimum required pension payment? Have you withdrawn this amount from the fund in the financial year? How much more is required to be drawn down prior to 30 June 2018?

Taxation

There are opportunities to manage the tax you will have payable in this financial year. This includes areas such as:

  • When you cease employment
  • Managing your capital gains tax
  • Prepay deductible expenses
  • Be aware of when you receive one-off payments which are considered income
  • Payment of private health insurance

If you would like to discuss any of the items above to see if they are relevant for your situation, call us and book a review meeting.

This document contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider you financial situation and needs before making any decisions based on this information.

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