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End of financial year Super strategies

A person can reduce personal tax payable, or reduce realised capital gains by making a deductible contribution to superannuation.

From July 1, 2017 the 10% test is no longer applied. This allows those who are fully employed to make personal contributions to super and claim a tax deduction.

The deduction will offset the tax payable on assessable income which also includes the taxable part of a capital gain. It is to be noted that the deductible contribution will be subject to contributions tax in the fund. For higher income earners (generally considered those earning over $250,000) an additional tax of 15% can be incurred.

The person must first be eligible to contribute to superannuation and second, must meet the following criteria to claim a tax deduction:

  • The contribution is made to the client's own account in a complying fund

  • The deduction applies in the year in which the contribution is received by the fund trustee

  • The person cannot create an income tax loss that is carried forward

  • If a person is turning 75, the contribution must be made on or before the 28th day after the end of the month in which they turn 75

  • If a child is under 18 at the end of the income year in which they make the contribution they must have derived income from carrying on a business or from activities which causes them to be an employee for SG purposes, and

  • A valid notice of an intention to claim the deduction must be given in an approved form to the trustee.

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