Mondy Financial Services

You still have time to save tax in the 2017/18 tax year.

Some of the ways you might be able to save paying too much income tax are as follows:

1. Lump Sums: If you receive an inheritance or sell an investment property and wish to invest your money why not consider putting some of it into superannuation. You may be able to contribute up to $100,000 per year (or $300,000 bringing forward 2 years). This is held within the super environment and therefore does not go against your personal tax return. If you have reached the age of 65 you will be able to draw out the money at any time and pay no tax on withdrawal.

2. Anyone (employees or self-employed) can now put tax deductible contributions into their super fund up to a maximum of $25,000 (including super guaranteed contributions by employers). This effectively means that the amount contributed will only be taxed at 15%. As an example a person selling a property and incurring a Capital Gains Tax liability may be able to reduce their taxable income and therefore reduce their overall tax by utilising this method. 

3. Putting super into a retirement phase – no tax in or out and earnings tax free (up to $1.6M)

4. Spousal Contributions - If your spouse earns less than $40,000 you will receive up to $540 if you make a contribution into their super account. The income thresholds for the spouse contribution tax offset are $37,000 (for lower threshold) and $40,000 (for upper threshold).

Note: This information is general, before acting upon any of these ideas you should seek professional advice to make sure it suits your personal circumstances. If you’d like to discuss tax strategies that could benefit you, why not contact me today on 0431 517 455 or email me at This email address is being protected from spambots. You need JavaScript enabled to view it..

 

 

 

From 1 July 2018, the Australian Government will introduce the 'Contributing the proceeds of downsizing into superannuation' (downsizing) measure. This measure is part of a package of reforms to reduce pressure on housing affordability in Australia.

This measure applies to the sale of your dwelling (your home), which was your main residence, where the exchange of contracts for the sale occurs on or after 1 July 2018.

If you are 65 years old or older and meet the eligibility requirements, you may be able to choose to make a downsizer contribution into your superannuation of up to $300,000 from the proceeds of selling your home.

Your downsizer contribution is not a non-concessional contribution and will not count towards your contributions caps. The downsizer contribution can still be made if an individual has a total super balance greater than 1.6 million.

Your downsizer contribution will not affect your total super balance until your total super balance is re-calculated to include all your contributions, including your downsizer contributions, on 30 June at the end of the financial year.

The downsizer contribution will also count towards your transfer balance cap, currently set at $1.6 million. This cap applies when you move your super savings into retirement phase.

You can only make downsizing contributions for the sale of one home. You can't access it again for the sale of a second home.

Downsizer contributions are not tax deductible and will be taken into account for determining eligibility for the age pension.

If you sell your home, are eligible and choose to make a downsizer contribution, there is no requirement for you to purchase another home.

Eligibility for the downsizer measure
You will be eligible to make a downsizer contribution to super if you can answer yes to all of the following:

  • You are 65 years old or older at the time you make a downsizer contribution (there is no maximum age limit).
  • The amount you are contributing is from the proceeds of selling your home where the contract of sale was exchanged on or after 1 July 2018.
  • Your home was owned by you or your spouse for 10 years or more prior to the sale.
  • Your home is in Australia and is not a caravan, houseboat or other mobile home.
  • The proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT (acquired before 20 September 1985) asset.
  • You have provided your super fund with the downsizer contribution form either before or at the time of making your downsizer contribution.
  • You make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually the date of settlement.
  • You have not previously made a downsizer contribution to your super from the sale of another home.Downsizer contribution amounts
    If eligible, you can make a downsizer contribution up to a maximum of $300,000. The contribution amount can't be greater than the total proceeds of the sale of your home.
    Example 1
    A couple sell their home for $800,000. Each spouse can make a contribution of up to $300,000.
    Example 2
    A couple sell their home for $400,000. The maximum contribution both can make cannot exceed $400,000 in total. This means they can choose to contribute half ($200,000) each, or split it – for example, $300,000 for one and $100,000 for the other. 

Source: ATO website
 

                                            

                                              Ever ridden in a car with worn-out shock absorbers?

                                              Every bump is jarring, every corner stomach-churning

                                     and every red light an excuse to assume the brace position.

                                    Owning an undiversified portfolio can trigger similar reactions.

Some clients have been worried about the current downturn in some investment sectors. Thefollowing article by Joim Parker from Dimensional will help you understand that a diversified portfolio will smooth out some of the bumps and make for a smoother ride.

Remember that you’re investing for the long term so a small bump in the road will seem insignificant a long way down the track.

 


 

BS in the market.....What gives you returns is what % of Growthy investments (=shares) you are invested. Do you really think one fund manager, one super fund or one indivudual can outpick all others...repeatedly..... over time. I would argue it is just not possible. So many people I see are biased towards their super fund, just because they are in that fund. I would prefer to do a considered analysis and get a non aligned professional opinion on my fund before I keep plowing money into it!
 

https://www.dropbox.com/s/r38xfx9ys84gnm5/History%20On%20The%20Run.pdf?dl=0

images/ThePolyphonyofMarkets.pdf

To make a plan for the future, it’s essential to look at what has and hasn’t worked in the past. Whether you're thinking about diversifying your super portfolio, are interested in trying the property market or are keen to play the stock market - making a plan that best reflects your needs and wants is a step in the right direction. Call Adam to find out how to get started - 0431 517 455


He says it should be evident by now that setting your investment course based on someone's stock picks or expectations for interest rates is not a viable way of building wealth in the long term. So the better option is to stay broadly diversified and, with the help of an advisor, set an asset allocation that matches your own risk appetite, goals and circumstances.


Every parent wants the best for their children but kids often won’t listen to the wisdom of your experience, especially when it comes to money. Don't give up! Here are some of the common beliefs and misconceptions kids have about managing money—and how you could get them to take your advice: http://bit.ly/1Xpyx5D


On 7 May 2015 the federal government announced changes to the Age Pension assets test (and confirmed this proposed policy in the May 2015 Federal Budget), affecting those retirees receiving a PART Age Pension. Click to read how the stricter Age Pension Test will operate: http://bit.ly/1lItRw3


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