Bantacs National Accountants Group

As a member of BAN TACS Accountants, IN8 Business Advisory has exclusive access to Noel Whittaker’s tips on building your wealth and minimising your risk. Read his latest column below:

Column by Noel Whittaker, June 19 2016

There were two particularly attractive superannuation measures in the recent budget. The first is that people who are working, and who make personal concessional superannuation contributions will be able to claim a tax deduction for those contributions even if the employer is making contributions too. Under the present rules you cannot claim a contribution if your boss is making contributions for you. Some employees get around this by using salary sacrifice, but that has created two types of employees – those whose bosses offer salary sacrifice and those whose bosses don’t. From 1 July 2017 it will be a level playing field.

The other good news is that the work test will be abolished for those aged between 65 and 75. Currently, they have to prove they have worked 40 hours in 30 consecutive days to be eligible to contribute. It was a stupid rule, and easy for anyone street smart to get around. From 1 July 2017, individuals will be able to make deductible contributions before they have turned 75. This could be particularly useful in reducing capital gains tax.

Suppose a retired couple sold shares or property that triggered a capital gain. Provided they were under 75 they could both make a deductible contribution of $25,000, which would reduce their taxable income and could reduce, or even eliminate, the taxable capital gain.

These changes open up a whole new world for anybody planning for retirement. The need to make provision for your own retirement still remains as great as ever due to rising life expectancies and the inability of governments to live within their means. Interest rates fell again this week and will almost certainly keep on going down. The big change now is we need to rethink how we build our wealth.

Noel Whittaker

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions.

Email: noel@noelwhittaker.com.au

RELATED ARTICLES

TPAR Cons

Be A Good Scout! Be Prepared!  

IN8 Portal2

Why use the IN8 Client Portal?

LIKE THIS ARTICLE?

Leave a Comment

Your email address will not be published. Required fields are marked *