With the end of the financial year upon us, these Superannuation tax planning strategies and task need to be finalised before 30 June 2022.

Contributions

Super Guarantee

Effective July 1 2021, the super guarantee rates increased from 10% to 10.5%. Ensure you payroll systems are updated and you’ve budgeted for the increased expenditure. In addition consider paying your June quarter contributions by June 28 to get your tax deductions in the current financial year.

Concessional Contributions

Concessional contribution deposits must be received prior to 30 June 2022 and are capped at $27,500 for the 2022 financial year.

To claim a tax deduction for your contribution, you must complete a valid notice of intent to claim a deduction, in the approved form, on or before the day you lodge your income tax return (or the end of the next income year, whichever occurs first), and you must receive acknowledgment of the receipt of the notice to confirm the deduction.

Non-Concessional Contributions

The non-concessional contributions cap for the 2022 financial year is $110,000, provided your super balance at close of the 2021 financial year is less than $1,700,000.

You can bring forward three years’ worth of non-concessional contributions in the one financial year, as detailed below, if you are under the age of 67:

A person between the ages of 67 and 74 must meet a work test to make non-concessional contributions and are limited to an annual cap of $110,000 with no opportunity to use the bring-forward rules.

PLEASE NOTE: From 1 July 2022 members will not need to pass the work test to make non-concessional contributions up to age 74. The maximum amount that can be contributed under the brought forward rules moves to $330,000 depending on similar eligibility per the above tiered balances. If you are in this age group it may be worth holding off any non-concessional contribution until after 1 July as no work test required.

Work Test

If you are between the ages of 67 and 74 you will need to pass a work test to contribute into your Super Fund, this requirement means a person must work 40 hours in a 30 day period once in the financial year to be eligible to make the contribution.

PLEASE NOTE: From 1 July 2022 you will only need to pass the work test if you’re under 74 and you intend to claim a deduction for your member contribution. As mentioned previously, no work test is required in order to make non-concessional contributions if the member is under age 74.

Catch Up Contributions

From 1 July 2018 if a person’s total super balance is under $500,000 they can utilise their prior year unused contributions cap (difference between cap and contributions actually made) and make a catch up concessional contribution into their Super Fund.

Downsizer Contributions

If you sold your principal place of residence or a property which at one time was your principal place of residence you can make a contribution up to $300,000 into your Super Fund. To qualify you need to be over the age of 65 and held the property continuously for a minimum 10 year period.

PLEASE NOTE: From 1 July 2022 the age eligibility is moving from 65 to 60.

Pensions

Indexation of Transfer Balance Cap (TBC)

Currently, an eligible member can establish a new pension of $1,600,000 which is added to their general transfer balance cap which is plainly, the amount of monies allowed in pension phase.

From 1 July 2021 this cap increased by $100,000 for eligible members to $1,700,000.

Members who have previously used some of their general transfer balance cap will only receive a proportional increase based on the highest ever balance of your transfer balance cap between 1 July 2017 and 30 June 2021.

Annual Minimum Requirement

If you are in receipt of a pension you will need to ensure that you have withdrawn your annual minimum prior to 30 June 2022.

For the 2019/2020, 2020/2021 and 2021/2022 financial years there is a temporary halving of the annual requirement for account based pensions similar pension products.

The temporary minimum rates are detailed below:

Asset Valuations

Trustees of SMSFs need to ensure that their investments including real property are revalued at 30 June 2022 to assist in the preparation of the financial statements.

For property holdings, a curb-side valuation can be completed which includes comparable sales data.

Maximum Number of Members in an SMSF

This has increased from a maximum numbers of members from 4 to 6 from 1 July 2021.

The information provided does not constitute financial product advice. Should you require further guidance or assistance with regards to the superannuation contributions, please contact Deepak Sachdev, Superannuation Services Manager – email or call