Hello,I am on line & extremely interested in this topic if anyone can advise me if “right” or “wrong” as I have two financial advisors with conflicting views.
Say I have a profit of $50000.00 & pay tax at the rate of .30 = $15000.00
Is it true at age 58 I can contribute $15000.00to my super (this financial year) as I am gainfully employed & then some time in the next financial year withdraw that same amount as I am no longer gainfully employed? Is this a legal & safe strategy?My understanding (which might be wrong) is that if your employment income is less than 10% of your total income then you can contribute profits to super and get a deduction. Maybe you could salary sacrifice your PAYG income.
Thanks for your reply. My total income is from my own rental properties & I am self employed. I can’t salary sacrifice as such,so I am still in a quandry!javascript:insertsmilie(‘[fear]’)
Sunny1,
If you have a profit of $50,000 you will be paying tax of $11,010, due to the progressive tax scales.
To reduce this to nil$ you will need to reduce your taxable income to $10,000. You will need a $51,667 deductible super contribution to achieve this as only the first $5000 is fully deductible, and then 75% of any amounts above that, to your age based limit.
Also remember that the super fund will pay 15% contributions tax on the $51,667 which is $7750, so the real tax savings is only $3260.
As you may be aware, the super rules are about to change dramatically from 1 July 2007, when you’ll be able to withdraw your super tax free if you are entitled to withdraw it in the first place. So assuming that you can withdraw the funds then your strategy will work, and is quite legal, but you will only be saving $3260 in tax.
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