So what are some of the things you might need to think about before the end of the financial year?
April is a great month to review your salary sacrifice contributions and make sure you are on track to maximise the opportunity in the current financial year. If you have not made any salary sacrifice contributions in the current financial year, you still have time to make a solid start. If you have been salary sacrificing and could do more, now might be a good time to think about ramping it up.
When it comes to tax effective superannuation contributions, there are a number of very simple strategies involving a drawdown from other assets to help you tax effectively contribute more than you might otherwise be considering.
April is also a great month to be thinking about splitting superannuation with your partner. Reasons to split super can vary but common reasons include equalising super balances or an age difference that means one of you is much closer to retirement. You have until the end of June this year to split 85% of last financial year’s concessional superannuation contributions.
There are also personal contributions for the Government co-contribution and spouse contributions for the spouse rebate that might be worthy of further consideration depending on your circumstances and eligibility.
If you have sold an investment property or another asset and have triggered a capital gain, don’t forget you may be able to use superannuation contributions to assist with managing any capitals gains tax liability. You still have plenty of time to seek advice and think, plan and act.
There might also be things to prepay or purchase to bring forward a tax deduction in the current financial year. Make sure you start the conversation with your tax adviser before it is too late.
If you are self employed, don’t leave it to the last minute to plan and make your superannuation contributions. If you are planning a superannuation contribution, make sure it is received in your superannuation account well before the end of June. We’ve seen it far too often where a contribution is delayed by an electronic transfer and the contribution ends up counting towards next year’s contribution limit and that can really stuff things up.
If you are thinking about superannuation contributions, don’t forget to review your superannuation fund fees. Believe it or not, there are options available that are more cost effective than the industry funds but few advisers will present them to you.
Finally, the 2016 Budget will be handed down on 10 May and it is difficult to predict how it might affect future investment decisions. There is a case for superannuation investors to bring forward their investment decisions in the hope that they can lock in some existing entitlements. Time will tell if this approach has merit.
HOT TIP: Don’t turn into an April fool because you are time poor, lazy or disorganised. As a minimum, take a moment to get some sound advice and plan your course of action for the three remaining months in the current financial year!
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