Blog Layout

Utilising Superannuation Tax Benefits Pre 30 June 2021

Justin Enright • June 13, 2021

Superannuation Tax Benefits Pre 30 June 2021

With 30 June 2021 on a Wednesday your super fund must receive your contribution by then to have it counted in the 2020-2021 financial year. A contribution is generally made and counted towards your contribution cap when the superannuation fund receives it. The key ingredient is ensuring enough time is allowed for the transfer of funds.

Eligibility to contribute to superannuation depends on age. Those age under 67 can contribute but if you are aged 67 to 74 you must meet a work test to contribute - which is 40 hours of gainful employment in 30 days. All is not lost if you do not meet the work test in 2020-2021 - you can still contribute under the work test exemption if you satisfied the work test in 2019-2020 and had a total superannuation balance of less than $300,000 at 30 June 2020.

Making a personal concessional contribution for which you can claim a tax deduction is straight forward as long as you contribute no more than the $25,000 cap for concessional contributions. If you also have employer contributions made for you by an employer for example then you need to be aware that they will count towards your $25,000 concessional contribution cap. You must ensure you provide your super fund with a notice of intent to claim a tax deduction and have it acknowledged by the superannuation fund trustee.

Be mindful also that you cannot create a tax loss by claiming a tax deduction for a personal contribution ie you cannot claim a tax deduction greater than the balance of your taxable income (no matter the amount of your contribution). In addition remember that a personal superannuation contribution is taxed at 15% in the superannuation fund and if your marginal rate of tax is less than or equal to this then you lose a tax benefit from making a personal contribution because of the effect of tax arbitrage. So if your taxable income for example is below the effective tax free threshold of $23,226 (after tax offsets applied) or for those eligible for the seniors and pensioners tax offset it becomes $33,898 for singles and $30,593 for each person of a couple then your tax benefit becomes nil.

If you didn't utilise the full $25,000 concessional contributions cap in the 2018/2019 and/or 2019/2020 Year's and have a total superannuation balance of less than $500,000 at 30 June 2020 then you can utilise your unused caps and contribute the same in 2021. This can be very advantageous if you have for example a capital gain that would abnormally increase your taxable income and need to mitigate this additional taxable income - a catch up contribution can serve this purpose. In another positive for planning purposes unused concessional contributions caps can be carried forward for a rolling 5 year basis.

A spouse concessional contribution will not increase your own tax deductions but will potentially reduce your tax payable. The age limit for spouse contributions has increased from 67 to 74 with the requirement that the receiving spouse must meet the work test from 67. Contributing a spouse contribution may result in a tax offset of up to $540 for a non concessional contribution to your spouses superannuation fund.

By Justin Enright October 12, 2023
Michael Kennedy, FCPA Strategic Business Advisor at Morse Group based at our Norwest practice office has marked his last day as a professional accountant on 30 June 2023. Michael started his journey in professional accounting commencing work as a graduate accountant in 1976 at then Price Waterhouse after completing a Bachelor of Commerce with Honours at the University of NSW. After training as an auditor and completing what was then called the Professional Year Michael yearned to go back to the Country after originating off a farm from Tallimba near West Wyalong in the Central West of NSW. Shortly thereafter Michael took a role in Dubbo working for Frank Darcy in Dubbo with a large proportion of primary production clients from the Coonamble area and other parts of Western NSW. Just two years later Michael was Frank Darcy’s Partner and Darcy Kennedy came into being. In the ensuing 24 years Darcy Kennedy grew into an award winning team of more than 100 with 12 Partners. After Darcy Kennedy transitioned into Investor Group now known as Findex Michael moved back to Sydney. This saw Michael as a Partner in a firm at Norwest being Macquarie Partners for 4 years and then Deloitte as a Partner for a further 4 years. In 2016 Michael commenced at Morse Group and shortly thereafter the Norwest practice office of Morse Group was established by himself and Justin Enright. This was the Renaissance of the client facing advice facet of Michael’s career. The Norwest office has continued to be the fastest growing practice office in Morse Group since. Michael most recently focused on advising clients (especially family groups) across Morse Group on tax and business development strategies with emphasis on the tax aspects of superannuation and self managed superannuation funds. Value laden high quality client advice was the key driver throughout Michael’s career in professional accounting. “I leave the profession with no regrets after a wonderful journey …not bad for a boy from Tallimba…and now finishing with 7 wonderful years at Regional firm Morse Group which is 90 years old and thriving…led by Justin Enright who worked at Darcy Kennedy as a graduate in the early 90s and is modelling his firm on the values and client service we extolled in Dubbo “said Michael Kennedy. “There are extremely few people in the world who it can be said “do more for an organisation than what the organisation has done for them”. Michael Kennedy is one such person. He has multiple examples of the same stretching from the start of his regional career at Darcy Kennedy through to the finale at Morse Group. We at Morse Group are extremely proud of and thank Michael for all of his client service, counsel, guidance, mentoring and generosity. Testament to this is the outpouring of gratitude from a plethora of advisors who Michael has mentored over many years. We congratulate Michael on this extraordinary career and wish himself, wife Kaylene and extended family all the very best for a well earned retirement” said Justin Enright, Managing Partner of Morse Group.
By Courtney Trewin July 25, 2022
Managing Partner Justin Enright attends the Western NSW Business Awards
By Courtney Trewin June 24, 2022
Managing Partner Justin Enright reflects on the 2022 Vinnies CEO Sleepout
More Posts
Share by: