Death and Pensions: An introduction Superannuation funds are generally exempt from tax on income and capital gains derived from assets which are used to fund pension liabilities that are currently payable. Superannuation interests subject to this rule are treated as being in pension phase or subject to a pension ... Read more
The tax treatment of super benefits and the proportioning rule
The tax treatment of a superannuation benefit depends on a number of factors: the age of the person; whether the benefit comprises a tax free component and or a taxable component; whether the benefit is in the form of a lump sum or an income stream (i.e. a pension); and whether the taxable component includes ... Read more
SMSF audit: Where is your fund’s trust deed and investment strategy?
Q: Do I need to provide a copy of my super fund’s trust deed and financial strategy to my SMSF fund auditor in order to complete the auditing process? ‘Yes’ is the answer, based on the ATO website’s guidance, and based on the super rules that approved SMSF auditors are supposed to review to ensure SMSF trustees are ... Read more
Accessing super: Turning 55 (or 56 or 57 or 58 or 59) is not enough
Q: I am 53 years old, born September 1964. I thought I could access my super funds from age 55 but I have been told I can’t access my funds until age 60. Is this correct? And, when I withdraw my super benefits, is there any tax payable? A: The general rule is that you must have reached your preservation age AND ... Read more
Case study: I’m 58 with $250,000 in super. Will my super be taxed?
Q: I turned 58 in July 2018, and I’m thinking of retiring before I turn 60. I would like to know whether I would have to pay tax on my superannuation. I know that after I turn 60, it’s tax-free, so my inquiry is regarding the period until I turn 60. My super money consists of compulsory employer contributions, and ... Read more
I’m retired. If I return to work, what happens to my SMSF pension?
Q: My husband turns 60 in January. We have an SMSF and he is going to commence retirement phase. He is essentially retired and only worked 4 hours this financial year. But what if he decides to work again in six months’ time? The account-based pension allows for lump sum withdrawals which is very advantageous and would ... Read more
If I retire before 60, when can I access my super?
Q: I am 57. If I decided to retire before 60 when can I access my super? A: If you have reached your preservation age AND retire, then you can access your super benefits. ... Read more
Unrestricted access to super, sometimes
Q: I have been a member of my super fund from about 1993. I see from your 14 legal ways to withdraw your super benefits article, that I may be able to access my restricted benefit. You write: “If you’ve been a member of a super fund since before 1 July 1999, you can cash your ‘restricted non-preserved benefit’ (certain ... Read more
Do I need to pay super for my 16-year-old employee?
I am a small business owner who currently employs a 16-year-old employee. She works a minimum of 20 hours per week and her gross income exceeds $450 per calendar month. Am I required to pay her superannuation? You will need to verify your SG responsibilities with the ATO (on 13 10 20) but the general rule is: if an ... Read more
Tax-deductible super contributions: Claim no more than your income
Q: If I make a personal concessional payment of $25,000 (tax-deductible) into my super fund and my personal taxable income for 2018/2019 is $20,000, are there possible tax penalties because I’m claiming $5,000 more than my taxable income? I suggest you chat to a registered tax agent, typically an accountant to ... Read more
Concessional contributions: What form do I use to claim a tax deduction?
Q: I want to make a tax-deductible super contribution to my super fund, in this case, an SMSF, although I also have a super account with an industry fund. I am trying to find the official form for claiming this type of deduction. Could you lead me to a link where I could find a generic S290-170 notice of intent to ... Read more
Does shift work count for SG entitlements and income protection insurance?
Q: I’m a shift worker and have a question about whether my ‘Super fund salary’ figure which my employer gives to my super fund should include both my base and shift loading salary. At the moment it only includes my base even though my employer does pay super for both my base and shift loading. What I’m concerned about ... Read more
Employees can now make tax-deductible super contributions
As an employee, the general rule when making super contributions is, you can take advantage of the concessional (before-tax) contributions rules by salary sacrificing, or by making tax-deductible super contributions. If you’re self-employed, you can take advantage of the concessional contributions rules by making ... Read more
Superannuation Guarantee: What hours does my employer have to pay super on?
Q: I am trying to find out on what hours my employer has to pay super. I get paid per hour plus over time, but it is a set roster of 12 hours per shift. Doing less is not optional so to me they are ordinary hours, not overtime, or is this a loophole for employers? Can you direct me to find out about this? Generally ... Read more
Fund choice: Can my employer insist I join the super fund they use?
Q: I am about to start a new position. I am 67 years old and have an SMSF. My new employer has said I must join the super fund they use and cannot use my SMSF as they have too many employees. It was my understanding I could have the Superannuation Guarantee paid to the super fund of my choice. Would you kindly let me ... Read more