6 super changes for FY2018/2019

New rules affecting super and tax offer fresh opportunities to consider this financial year 

1.     Buying your first home?

From 1 July this year, eligible first home buyers can withdraw voluntary contributions made after 1 July 2017 to their superannuation fund to purchase a first home under the First Home Super Saver Scheme (FHSSS). The FHSSS allows eligible first home buyers to save their deposit in the concessionally taxed super environment.
 

2.     Selling your home?

Eligible super members can make super contributions of up to $300,000 per person from the sale of their home after 1 July this year, if they are aged 65 or over and meet other conditions. These contributions don’t count towards the concessional and non-concessional contribution caps and can be made even if the member doesn’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 that could be done with the extra cash, such as paying off debt and making extra super contributions (see opportunity 4).

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’ The tax liability and reduction in tax is calculated taking into account the basic tax scales, low income tax offset, low and middle income tax offset and the Medicare levy (at 2 per cent with the change to the Medicare levy low income thresholds).
     

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. This could reduce taxable income and give super savings a much needed boost.
 

5.     Not likely to max out your super cap?

If super members make concessional (pre-tax) super contributions of less than the cap of $25,000 in 2018/19, they may be able to carry forward unused cap amounts, for use in a future financial year. This is worth keeping in mind – particularly for members who take time off work or work part-time. It means members may be able to make ‘catch-up’ concessional contributions from 1 July 2019, if their 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?

From 1 July this year, if a pension is started or is running in an SMSF, certain events may need to be reported to the ATO using the ‘Transfer Balance Account Reporting’. Also, while not yet in effect, if a new limited recourse borrowing arrangement (LRBA) is started in an SMSF, there is a potential law change that would make the outstanding balance of a relevant LRBA count towards the members’ ‘total super balance’.

 

Important information and disclaimer
This information is provided by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465, a member of the National Australia Bank Limited (ABN 12 004 044 937 AFSL 230686) group of companies. An investment with NULIS does not represent a deposit or liability of, and is not guaranteed by, the NAB Group. The information in this communication may constitute general advice. It has been prepared without taking account of individual objectives, financial situation or needs and because of that you should, before acting on the advice, consider the appropriateness of the advice having regard to your personal objectives, financial situation and needs. NULIS believes that the information contained in this communication is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made as at the time of compilation. However, no warranty is made as to the accuracy or reliability of this information (which may change without notice). Past performance is not a reliable indicator of future performance. This information is current as September 2018 and may be subject to change, for example should there be a change of legislation or economic conditions.

Tax disclaimer
Any general tax information on this website 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 your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.