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Blog | Last quarter planning

Chris Morcom
Partner/Private Client Adviser
12 Apr 2021

With the football season now upon us, I can’t help but draw the analogy between the last quarter of football and the last quarter of the financial year. In this last quarter, it’s important to review your positions before the final siren on June 30.

The following provides an overview of the main superannuation issues to consider before the end of the financial year. 

Concessional Superannuation Contributions 

  • Maximise your Concessional Contributions – the limit this year is $25,000.   
  • If your super balance is under $500,000, and you have not maximised your concessional contributions since 1 July 2018, then you may be able to “carry-forward” those unused contributions and make them this year.  This can be particularly helpful if you have an unusually high taxable income this year (perhaps from the sale of a property or some shares). 
  • Also, make a diary note to review your salary sacrifice arrangements from 1 July this year – the limit will increase to $27,500. 
  • If you plan to claim a personal tax deduction for contributions to superannuation this year, then you will need to ensure you complete a valid notice of intent to claim – this is an ATO form and can be found HERE
  • Maximise your Non-Concessional Contributions – the limit is $100,000 per annum, but you can bring forward two future years and make a $300,000 contribution this year.  Keep in mind the limit will increase to $110,000 from 1 July 2021. 
  • Remember that you cannot make any further Non-concessional Contributions once your superannuation balance (measured on 30 June of the prior year) exceeds $1.6 million.  This limit will increase to $1.7 million from 1 July 2021. 
  • Subject to the maximum cap above, you can make these contributions to superannuation up to the age of 67 without having to work.  If you are over 67 and under 75, you can still make Non-concessional contributions so long as you have worked for 40 hours in a 30 consecutive day period in the year before you deposit money to your super fund. 

Minimum Superannuation Pensions 

Ensure you have drawn the minimum required pension from your superannuation fund prior to 30 June.  The minimums for this year are in the table below for your reference: 

AGE 2020/21 Minimum 2020/21 Minimum
Under 65 2% 4%
65 – 74 2.5% 5%
75 – 84 3% 6%
85 – 89 4.5% 9%
90 – 94 5.5% 11%
Over 95 7% 14%

Superannuation Contribution Spitting 

For those with a spouse, you could consider the use of this strategy to keep your superannuation balances even.  With the maximum limit of $1.6 million (soon to be $1.7 million) that you can shift into a retirement phase superannuation pension, it is important for spouses to try even up balances if one spouse is in danger of exceeding that limit. 

You will need to complete some forms to lodge with your superannuation fund prior to the finalisation of the fund accounts for the year.  You can find the ATO forms HERE  

Withdrawal and Re-Contribution  

In the same vein of attempting to even out superannuation balances prior to drawing a retirement pension from your super, you may also be able to withdraw a lump sum from the spouse with the higher balance and re-contribute the same amount for the other member of the couple. 

This can only be done if the person withdrawing the funds is eligible to do so, meaning they must have access to superannuation benefits that are Unrestricted Non-Preserved benefits.   

SMSF reminders 

  • Regulations require assets of an SMSF to be valued at Market Value at the end of each financial year.  More information from the ATO can be found HERE  
  • The ATO has instructed SMSF auditors to take a greater interest in the Investment Strategy in place for the SMSFs they are auditing.  An SMSF must have in place a valid and documented Investment Strategy, and that strategy must be reviewed at least annually. 

Something else? 

  • The government can top-up your superannuation through their co-contribution scheme.  To access this scheme, you need to have earned income from employment or business, your income needs to be below $54,837, and you need to contribute $1,000 to your super fund.  The maximum government co-contribution is $500, and this reduces once your income exceeds $39,837. 
  • If your spouse has a taxable income of less than $37,000, then you could contribute $3,000 to their super fund and you would receive a $540 tax offset. 
  • Do you have a beneficiary nomination in place for your superannuation benefits?  Is it current and in force?  Many superannuation funds (and SMSFs in particular) can now provide non-lapsing beneficiary nominations, as opposed to those that require renewal every three years. 
  • The market gyrations of the past 18 months may have seen your investment portfolio with some assets at a loss and others at substantial gains.  You might like to review your portfolio in consideration of your tax position and update your portfolio accordingly. 

With the end of the financial year approaching, you should review your superannuation arrangements before the siren sounds this year.  Make sure you make your contributions in time so that they are received in the super fund bank account prior to 30 June. 

The above list is not exhaustive, some of the items mentioned involve complexity and some have long-term implications.  The strategies listed do not consider your personal circumstances, and I recommend you seek advice from an appropriately qualified adviser prior to implementing any of these strategies. 

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.