On this column LUISA CAPEZIO and CRAIG PHILLIPS, of Phillips Wealth Companions, take a look at the advantages of ‘downsizer’ contributions.
Certainly one of our favorite adjustments to the superannuation guidelines in 2018 was to permit a one-off “downsizer” contribution to superannuation with out a number of the traditional restrictions.
To be eligible for the “downsizer” contribution, an individual must be:
60 years of age or over.
- The first residence which you promote should be in Australia,
- have been owned by you or your partner for a minimum of 10 years, and the sale should be exempt or partially exempt from capital beneficial properties tax.
- The first residence shouldn’t be a caravan, houseboat or different cell dwelling.
People can contribute as much as $300,000 of the sale proceeds to superannuation (or $600,000 as a pair).
You will need to not have beforehand made a “downsizer” contribution to your tremendous from the sale of one other dwelling or from the half sale of your private home.
Earlier than (or concurrently) making your contribution you will need to present your fund with the “downsizer contributions into tremendous type” which might be accessed from the ATO.
A few factors to notice:
The contributions should be made inside 90 days of the settlement and contributions aren’t tax-deductible, so you’ll be able to’t declare a deduction in your contribution in your revenue tax return.
Downsizer contributions aren’t topic to the 15% contributions tax after they enter your tremendous account.
A last consideration is that if the technique is to create a pension make certain you take into account the minimal pension funds that are aged primarily based.
There are different alternate options to superannuation which will lead to higher age-pension outcomes and decrease means-tested care charges related to fund a transfer into everlasting residential age care.
To be taught extra, name us on 1300 10 22 33 or e book a 15-minute name (without charge) through our web site phillipswp.com.au
Disclaimer: This column incorporates basic recommendation, please don’t depend on it. In case you require particular recommendation on this matter please contact Phillips Wealth Companions or your skilled adviser. Phillips Wealth Companions Pty Ltd ACN 624858420 is a company authorised consultant of Perception Funding Companies Pty Ltd AFSL 309996.
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Ian Meikle, editor