Welcome to Finance and Fury. Sorry for no episodes, EOFY always a busy time, so haven’t had a chance to prep much or find time to record.

Excuses` out of the way and in the spirt of the end of the financial year – as it is almost here – I wanted to do a bit of a quicker episode than normal, as a reminder and to provide a checklist on options to minimise tax or maximise wealth benefits prior to the end of the financial year.

This episode is general information only – not intended to be personal advice, but lays out the options available based around your personal circumstances

  1. In this episode, we will be looking at the different options available and your eligibility depending on your personal circumstances – some will work well, some wont – important to seek independent advice if you are unsure

To start – One of the best options available to most people will revolves around Superannuation strategies – the difference is between pre and post-tax contribution strategies that depend on your reportable income for the financial year – to start breaking this down

  1. Government co-contribution – This is a form of payment that the government co-contributes into your superannuation account, if you make a non-concessional contribution into your account and meet the eligibility criteria
    1. There are two types of contributions to superannuation – classified as pre or post tax – the terminology is concessional or non-concessional – For the government co-contributions, these need to be after tax, or non-concessional
    2. Eligibility – If you earn less than $42,016 in 2022-23 financial year, you are eligible and make a personal or non-concessional contribution of $1,000, then you could receive a maximum of $500
      1. The way this works is that the government will contribute 50c for every $1 you contribute up to a maximum of $500 if you are below the income threshold
      2. However, whilst you are eligible and you earn between $42,016 and $57,016 in the 2022-23 financial year, you may still receive a partial co-contribution – for every dollar earnt above the $42,016 threshold, the co-contribution reduces by $0.033 cents.
  • So the more you earn, the less co-contribution you’ll receive – this is where the threshold is $57,016 before you can’t receive a co-contribution.
  1. If you are eligible and do make a non-concessional contribution, you don’t need to apply for the super co-contribution, as long as you lodge a tax return for the 2022-23 financial year, the ATO will pay any eligible co-contributions into your account automatically
  2. Where I have seen this work – in a couple if one person is not working, working part time, or on maternity leave and their assessable income is below the threshold – making a non-concessional contribution can provide a benefit to their account – $1,000 non-concessional contribution results in a $500 benefit – i.e. a 50% gain on the invested funds – impossible to get a guaranteed 50% gain on your investments in 1 years
  3. The things to watch out for – beyond the eligibility requirements – remember that superannuation contributions are not accessible until preservation age – for most people that is 60 now – but may change
    1. Getting an instant $500 return of a $1,000 contribution is a good deal, but if that is your last $1,000 and you may need it to cover bills, it can actually be of detriment
  4. Non-Concessional contributions – whilst not deductible, additional contributions to the supernation environment can provide some addition benefit – form the lower tax of invested funds – or through the reduction in tax paid on personal income tax
    1. Beyond the co-contributions entitlements – are able to contribute personally to superannuation
    2. Whilst it isn’t a deductible contribution, or if your income is above the amount that you receive a co-contribution on, the superannuation environment can provide a tax benefit depending on your individual marginal tax rate
    3. Work test has been removed – $1.7m cap one thing to watch out for – but anyone prior to the age of 75 can now use their NCC caps each year to put money into superannuation – – through cash or asset transfers based on the type of account held
  5. In specie transfers – this is the process of transferring assets that you own personally, or within a family trust, into the superannuation environment
    1. This will depend on the type of superannuation account that you hold – if it is an industry fund, not available – but a retain WRAP account, can start to accumulate personally held investments inside of superannuation
    2. When you are approaching retirement – or close to preservation age, consolidating personally held assets into super can provide a relief of income tax in retirement
    3. The one thing to watch out for is the CGT – but technically you can claim a deduction on the CGT through claiming a concessional contribution on these transferred assets – if you aren’t working, and no SG has been paid, you can claim up to $27,500 per financial year…….what to watch out for is that the ATO may see this is being against the spirit of the law, whilst it is legal, and the law says you can do it, the government in their wisdom can say that it isn’t in the spirit of the law, or whatever that means, as people are trying to reduce their tax payable, how dare they – hence they should pay they fair share – I haven’t seen this happen in practice – but it is caked into the laws, so it should be taken with a grain of salt
  6. Deductible contributions – this depends on your taxable income as to the viability – but since the 90/10 rule is not longer a thing, everyone is eligible to make a personal contribution to superannuation and claim a deduction on this
    1. This all falls under the Concessional contribution’s caps – based on the current financial year – this is $27,500 cap
      1. So, you need to look at what concessional contributions have been made for the financial year, through your employer and salary sacrifice – anything that has been contributed to super pre-tax – Then minus this from the CC of $27,500 – this means that the difference is what you can personally contribute to super to claim a deduction on
        1. Say your employer contributions are $15,000 for the financial year, but you don’t SS anything, you can then contribute up to $12,500 in personal deductible contributions – however you will pay 15% on these contributions – which can be lower than your individual MTR – which at SG of $15k would be 39% – so you are saving 24% on your contributed funds
      2. Catch up contributions = You can use unused concessional cap in one financial year – going back to the 2019 financial year
      3. This concessional cap includes any employer contributions, salary sacrifice and personal deductible contributions – this all has a cap of $27,500
        1. What to watch out for – Division 293 tax – if your income plus super contributions is more than $250k, you can pay 30% on the contributions instead of 15% – still beneficial, but not as much as if your concessional contributions were taxed at 15%
      4. In addition – In recent financial years, the ATO introduced Catch up concessional contributions – allowing individuals to make additional concessional claims against contributions to superannuation to offset current financial years gains
        1. If you make or receive concessional contributions (CCs) of less than the annual concessional contributions cap of $27,500 pa (for the 2022/23 financial year), you may be able to accrue these unused amounts and carry forward for use in subsequent financial years. This is known as catch-up concessional contributions.
        2. Catch-up concessional contribution can accrue from 2018/19. Unused cap amounts can be carried forward for up to five years before they expire. To be eligible to make catch-up CCs, one criterion is your total super balancemust be below $500,000 at the prior 30 June.
          1. prior to the 2022 financial year, concessional contribution cap was $25,000 – but this is where the contribution caps changed
        3. Benefits in financial year where you have a larger than normal assessable income – can come from the sale of a CGT asset – or large bonus from employment income
          1. Say you sell a property, or other GCT asset, you can look back at your unused caps and help to offset your income tax payable by increasing your CC to super
        4. What to watch out for – reportable income above $250,000 – division 293 tax – which results in 30% tax for the contributions above $250k – but if you are well above this cap, then 30% is still better than 47%
      5. Whilst we are on that subject – TTR strategies – also seen as a similar law that has existed for decades, but now is not within the sprit of the law – TTR strategies provide little in the way of taxation benefit
      6. Spouse contributions – A spouse super contribution is a voluntary after-tax contribution into the super fund of a low-income-earning spouse or de facto partner. The person making the payment may benefit from a tax offset (reduction) of up to 18% for contributions up to $3,000 per year.
        1. Eligibility is strict – but it may be worthwhile to look into based around the minimum incomes that can be earnt, which is below the $40k margin
      7. Remember that this is only general information only – it is up to you to determine if this is appropriate or not

Private health cover – to avoid Medicare levy surcharge

Threshold Base tier Tier 1 Tier 2 Tier 3
Single threshold $90,000 or less $90,001 – $105,000 $105,001 – $140,000 $140,001 or more
Family threshold $180,000 or less $180,001 – $210,000 $210,001 – $280,000 $280,001 or more
Medicare levy surcharge 0% 1% 1.25% 1.5%
  1. Incomes of $210k as a family unit – without private health, you can pay $2,100 in additional tax – if your income is $240k, where say two people are on $120k p.a., then $3,000 of tax is paid –
  2. To offset you need hospitals cover – so basic hospital cover may be less than this tax depending on your situation

Interest – This is a major component of EOFY preparations based around your individual situation 

  1. There isn’t much to work around here unless you have the cashflow and the capacity to Claiming interest by paying upfront – getting to claim future interest payments prior to the end of the financial year


  1. Deductibility – Always remember that you deducibility Is based off of your marginal tax rates
    1. Manny people that negative gearing Is of benefit – but if can be of detriment if you are in a low MTR rate individually, or within a nother structure such as a family trust or SMSF – SMSF at 15% and deductibility is trapped in the FT – so unless the trust has a high income, the deductibility will be lost
  2. This is the wrong way to think about inkesting
    1. Any interest deductions are only worth their MTR –
  3. Cashflow is key in conjunction with capital appreciation

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