Contribution Strategies

Age Based Limit

• (2) make spouse co-contribution if she is not working and holds no director position up to the maximum of $1,000, to find out more on the eligibility conditions <click here>.

Excessive Concessional Contributions – Div 7A Tax Savings

Concessional Contributions thresholds apply, so that where contributions are made to your Super, whether by you or by another, you will need to pay excess concessional contributions tax of 31.5% and the SMSF would have paid 15% contributions tax. While this seems like a penalty, if you are on the highest rate of marginal personal tax in then you would have paid 46.5% tax including medicare therefore your tax position is the same. <click here for tax rate changes>. Because of this there are a number of benefits that can arise:

• you are able to get more money into your SMSF, if your underfunded in your SMSF this can be another way of catching up.
• If the SMSF has tax losses or a property in the property is negatively geared, excess contributions in the SMSF will not be taxed as there is no taxable income, therefore only the personal excess contributions tax of 31.5% applies.
• Avoid a deemed dividend from a Div 7A loan that has not been repaid by making a excessive contribution to the extent that the distributable surplus (broadly net assets of the company/employer) is reduced to Nil or less than  Nil.