With an end-of-financial-year checklist, you may be able to invest in your business, better manage your cash flow, minimise your tax liability and bump up your super! Here are ten inclusions.
The information contained in this article is correct as of July 2018 and is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.
1. To be eligible to claim a tax deduction for the contribution, you must earn less than 10% of the total of your assessable income, reportable fringe benefits and reportable employer super contributions from eligible employment. Other conditions also apply. 2. Personal deductible super contributions, employer contributions (including salary sacrifice) and certain other amounts will count towards a concessional contribution cap. Concessional super contributions currently are capped at $25,000 pa, for people aged 48 or under on 30/6/17 and $25,000 for people aged 49 or over on 30/6/17. To be able to salary sacrifice your super, you need to have an effective salary sacrifice agreement in place with your employer prior to the income being earned by you (or in other words, the agreement must be in place before you perform the work to earn the income). 3. Tax may be payable on death and TPD benefits paid from within super. To make a provision for tax, you could increase the sum insured. While this will generally increase the premiums, the after-tax cost may still be lower than insuring outside super, when you take into account the upfront tax concessions available. You must also meet a condition of release under superannuation laws to be able to draw upon your insurance benefit. 4. Turnover is gross of any expenses and is net of GST that is charged on sales. It includes the sum of the entity’s turnover for an income year and the annual turnover of any entity that it is connected or affiliated with during that income year. 5. Personal after-tax super contributions and certain other amounts will count towards a non-concessional contribution (NCC) cap. In 2017/2018, this cap is $100,000. However, if you are under age 65, it is possible to contribute up to $300,000 in 2017/18, provided your total non-concessional contributions in that financial year and the following two financial years do not exceed $300,000. In addition to this cap, it’s also possible to make personal after-tax super contributions of up to $1,445,000 over your lifetime using certain proceeds from the sale of small business assets. If you have a spouse, you could potentially take advantage of two NCC caps and two $1,445,000 lifetime limits. (The lifetime CGT cap is indexed annually and increases to $1,480,000 on 1 July 2018). 6. Under the 3 year bring forward option for the non-concessional cap. Other conditions apply. 7. A TRP is a type of income stream investment that allows you to access your preserved and restricted non-preserved super benefits when you’ve reached your preservation age (currently 55 for those born before 1 July 1960). Limits apply to the amount of income you can receive each year and lump sum withdrawals can only be made in certain circumstances.