Make The Most Of End Of Financial Year (EOFY) Opportunities

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Make The Most Of End Of Financial Year (EOFY)
Opportunities
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With the end of the financial year fast
approaching there may be some valuable
opportunities that might be worth discussing.
Depending upon your personal circumstances there
may be some planning strategies that may benefit
you or your family in the lead up to the end of
this financial year.
Superannuation
Maximise concessional contributions
Concessional contributions may reduce your
taxable income and the amount of tax you pay as
an individual. These contributions are taxed at
up to 151 within superannuation which may be
lower than your marginal tax rate. Concessional
contributions include employer contributions,
amounts salary sacrificed during the year and
personal contributions for which a tax deduction
is claimed.
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With the end of the financial year fast
approaching there may be some valuable
opportunities that might be worth discussing.
Depending upon your personal circumstances there
may be some planning strategies that may benefit
you or your family in the lead up to the end of
this financial year.
Maximise non-concessional contributions
Non-concessional contributions are contributions
made from after tax income or savings. Although
these contributions do not reduce your taxable
income, you may still benefit from reduced
investment earnings tax of up to 15 as opposed
to investing the amount outside of superannuation
where earnings are taxed at your marginal tax
rate. These contributions are not taxed upon
entry to superannuation and form part of your
tax-free component.
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Non-concessional contributions are capped at
100,000 for the 2020/21 income year. If certain
requirements are met, individuals can bring
forward two years of annual caps and contribute
up to 300,000 before 30 June 2021 without having
to exceed the cap.
Accessing the Government co-contribution
Individuals with assessable income2 of below
54,838 may qualify for the government
co-contribution of up to 500 if they make a
non-concessional contribution of 1,000 before 30
June 2021. To qualify for the co-contribution

• at least 10 of assessable income must be
  received from employment or self-employment
  arrangement
• the individual must be below age 71 at the end of
  the financial year

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• they must have Total Superannuation Balance of
  less than 1.6m on 30 June 2020 and
• they must lodge a tax return for the 2020/21
  income year

Make a spouse contribution
Couples with one spouse earning a low income or
no income, may benefit from the spouse tax offset
if the high-income earner makes a spouse
contribution into the low-income earner spouses
superannuation. The maximum offset that can be
claimed is 540 where the low-income earner
spouses income is below 37,0003 and 3,000 is
contributed before 30 June. In addition to the
tax benefit available to the high-income earner
spouse, the strategy can also help to build up
superannuation savings for the low-income earner
spouse.
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1. Up to 30 if you earn 250,000 or more.
2. Assessable income for this purpose includes
   assessable income plus reportable fringe benefits
   plus reportable employer contributions less
   business deductions.
3. Income for this purpose includes assessable
   income plus reportable fringe benefits plus
   reportable employer contributions.

Contributions splitting
Another way to increase spouses super is
implementing the contribution splitting strategy.
The strategy allows eligible spouses (married or
de facto) to split up to 85 of concessional
contributions (including mandatory employer
contributions) made in the prior financial year.
30 June 2021 is the deadline for splitting
concessional contributions made in the 2019/20
income year.
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First Home Super Saver Scheme
Individuals saving for their first home may
benefit from making voluntary contributions to
super before 30 June. The FHSS Scheme allows
first home buyers to make voluntary contributions
of up to 15,000 to superannuation per financial
year while saving towards the deposit in a
tax-effective environment. After contributing for
a couple of years, they can withdraw these
contributions (up to 30,000 per individual) and
use the proceeds towards the acquisition of their
first home.
SMSF Contribution Reserving
This strategy allows SMSF members to make
personal deductible contributions over the annual
cap in June and claim larger tax deduction for
the current year.
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SMSF meeting the minimum pension requirement
SMSF Trustees with members in the retirement
income phase must ensure the minimum pension
requirement is met before the 30th of June.
Otherwise, the income stream will be taken to
have ceased for income tax purposes at the start
of the year and the SMSF will lose the
eligibility to claim the tax-free earnings for
that year.
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Taxation
Prepay income protection premiums
Individuals holding income protection insurance
outside of superannuation can prepay premiums for
the next 12 months to bring forward the tax
deduction to the current financial year. This may
be beneficial where individual has larger than
expected taxable income for the current year.
Prepay interest on investment loan
Similar to prepaying income protection premiums,
prepaying deductible interest on an investment
loan before 30 June 2021 will bring forward the
tax deduction to the current financial year.
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Social Security
Gifting
Social security recipients wishing to gift an
amount or an asset within the allowable disposal
amount can do so before 30th June. These
individuals can gift up to 10,000 before the
30th of June and another 10,000 after 1 July
2021, a total of up to 20,000 over June and
July. Individuals in receipt of government
benefits can gift up to 10,000 in a single
financial year or up to 30,000 over 5 rolling
financial years. However, the amount gifted in
any given financial year cannot exceed 10,000 or
the deprivation rules will be applied.
We encourage you to contact the office to discuss
if any of these strategies might suit your
personal circumstances, goals and objectives.
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IMPORTANT
Certain eligibility requirements may apply to
strategies listed. To avoid penalties, we
strongly recommend seeking advice from your
financial planner before implementing any of the
strategies explained in this article.
The information contained in this article is
general information only. It is not intended to
be a recommendation, offer, advice or invitation
to purchase, sell or otherwise deal in securities
or other investments. Before making any decision
in respect to a financial product, you should
seek advice from an appropriately qualified
professional.
We believe that the information contained in this
document is accurate. However, we are not
specifically licensed to provide tax or legal
advice and any information that may relate to you
should be confirmed with your tax or legal
adviser.
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Contact Us
Address 13/11 Narelle Drive, Aspendale Gardens
VIC 3195 Australia.
PH 61 3 9034 4883 61 402 895 593
Email clientservices_at_sfadvisory.com.au,
Web www.sfadvisory.com.au
www.sfadvisory.com.au
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