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Six new opportunities for fy 2018/19

New rules have recently created new opportunities for you to consider when making plans for 2018/19.

Important notice: Any advice and information in this publication is of a general nature only. Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of an individual’s liabilities, obligations or claim entitlements that arises, or could arise, under taxation law, and we recommend that you consult a registered tax agent. nabtrade is not a registered tax agent.

 

New rules have recently created new opportunities for you to consider when making plans for 2018/19. Six of them have been outlined below.
 

1. Buying your first home?

From 1 July this year, you can withdraw contributions made to the First Home Super Saver Scheme (FHSSS) to purchase your first home. The FHSSS allows eligible first home buyers to save their deposit in the concessionally taxed super environment.

2. Selling your home?

You can make super contributions of up to $300,000 per person from the sale of your home after 1 July this year, if aged 65 or over and you meet other conditions. These contributions don’t count towards the caps and can be made even if you don’t meet the usual age, work and other contribution tests.

3. Eligible for a tax cut?

The tax cuts announced in this year’s Federal Budget have been legislated. The first tranche took effect on 1 July this year, providing savings of up to $530 – see table below. There are a number of things you could consider doing with the extra cash, such as paying off debt and making extra super contributions (see opportunity 4).

 

Tax savings

Taxable income

Tax paid in 2017/18

Tax savings in 2018/191

$40,000

$4,947

$290

$80,000

$19,147

$530

$120,000

$34,432

$215

$160,000

$50,032

$135

$200,000

$67,232

$135

 

1 Source: Budget 2018-19 fact sheet, ‘Lower, fairer and simpler taxes’

 

4. Want a super deduction?

From 1 July 2017, most people (including employees for the first time) are eligible to claim personal super contributions as a tax deduction. By doing this, you could reduce your taxable income and give your super savings a much needed boost.

5. Not likely to max your super cap?

If you make concessional (pre-tax) super contributions of less the cap of $25,000 in 2018/19, you may be able to carry forward unused cap amounts, for use in a future financial year. This is worth keeping in mind – particularly if you take time off work or work part-time. It means you may be able to make ‘catch-up’ concessional contributions from 1 July 2019, if your cashflow allows. Concessional contributions include all employer contributions (super guarantee and salary sacrifice), personal contributions claimed as a tax deduction and certain other amounts.

6.  Have an SMSF?

There are some changes that took effect on 1 July this year you need to be aware of. If a pension is started or is running in your fund, you might need to start reporting certain events to the ATO using the ‘Transfer Balance Account Reporting’. Also if you start a new limited recourse borrowing arrangement, the outstanding balance will count to your ‘total super balance’ if you have satisfied certain ‘conditions of release’ or the arrangement is with a related party.

Need help?

To find out more about these opportunities you could visit the ATO website or consult a financial adviser.


About the Author
Gemma Dale , nabtrade

Gemma Dale is Director of SMSF and Investor Behaviour at nabtrade. She is the host of the Your Wealth podcast, a fortnightly podcast for investors, featuring insights and updates from markets and finance experts across a range of topics. She provides regular market and finance commentary on ausbiz and in other media including AFR, the Australian, ABC and commercial tv and radio. Gemma was previously the Head of SMSF Solutions for nab, and the Head of Technical Services for MLC, where she led a team of specialists providing advice to advisers and their clients on SMSF, super, tax, social security and aged care.