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Take advantage of these super opportunities

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Superannuation is one of the most tax-effective ways of providing for your future.

From 1 July 2007, the Government is introducing a “simpler superannuation” regime, which boosts the attractiveness of superannuation as an investment vehicle, making it an even more tax-effective way to fund your retirement.

Take advantage of these super opportunities

We have identified a few opportunities that may help you boost your super. You may have to act before 30 June 2007 to take advantage of these opportunities.

Please contact us if you wish to discuss how these changes will benefit you.

Opportunities to take advantage of before 30 June 2007

  • Super large contributions – contribute up to $1 million before 30 June 2007: For the period between 10 May 2006 and 30 June 2007, you can make up to $1 million in after-tax contributions into super**. The transition period is a one-time opportunity.
  • Provide your tax file number (TFN) to avoid excess tax: Please provide us, or your super fund, with your tax file number (TFN) if you haven’t already done so. Whilst this isn’t a legal requirement, if you don’t provide your TFN, all employer contributions made after 1 July 2007 will be taxed at an additional 31.5%, and you won’t be able to make personal contributions.

Opportunities to take advantage of after 1 July 2007

  • Tax free benefits from age 60: From 1 July 2007, there will be no tax payable on superannuation benefits, whether taken as a lump sum or pension, once you turn 60. Reasonable Benefits Limits (RBLs) are being removed as well, so there will be no limit on the amount you can accumulate in super.
  • Why not sacrifice some of your salary into super? Although this willhis reduce your income now, the amount you put into super will only be taxed at 15% instead of your marginal rate. This means there’s more money in your super working hard for you.
  • Your Term Allocated Pension can maximise your social security entitlement: From 20 September 2007, the 50% Assets Test exemption will cease. Term Allocated Pensions opened before then will continue to enjoy the 50% exemption indefinitely. This could help you get under the Assets Test thresholds for a full or part age pension.

**Employer contributions in excess of the age-based limits applying in 2006/2007 count toward the $ 1 million.

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