A really simple super idea

Superannuation can be a bit of a bore, but this year it is a totally new ball game. Just in case you missed it, these superannuation rule changes, courtesy of Treasurer Peter Costello, should be examined closely before you direct a big yawn to this super innovation.

The time is now
Capturing the imagination of many is the window of opportunity to put $1m into super before 1 July this year. And it goes double if you are a couple.
At no other time has there ever been a bigger reason to either become a super expert or to go looking for one you can trust.

Food for thought
Want proof? Well, think about this: MLC's technical expert Andrew Lawless says there are many strategies average Aussies and business owners should consider before 1 July.

Christmas comes early
To underline the gift-like nature of these super changes, Lawless explains that someone who retires at age 60, who might accept $50,000 a year from a super-created allocated pension and, say, $25,000 a year from an investment property, currently pays $11,475 in tax - but this will shrink to $412 from 1 July.
"This is a very generous treatment and makes a strong case for Australians, especially those approaching 60 years of age, to put their assets into super," says Lawless.

But wait, there's more
The big attraction for 60-year-olds and over is the fact that super pension money will not be taxed and any other money you might access, say, from an investment property, will be taxed from the bottom of the tax scale up.

What if I'm self-employed?
Business owners have a big incentive to master the new rules, but you have to know whether you are self-employed or not.
Self-employed means you receive less than 10 per cent of your assessable income, including reportable fringe benefits, from any work as an employee. A big pay off here is that you should be able to claim your personal super contributions as a tax deduction.

And if I'm an employee?
On the other hand, being an employee in your own company means you earn 10 per cent or more of your assessable income along with fringe benefits from this position. Generally you won't be able to personally claim a tax deduction from super contributions, but you can opt for the salary sacrifice option.

Through the looking glass
Lawless thinks business owners should look hard at the transitional opportunity before 1 July to throw up to $1m into super, which could include putting the business premises into a self-managed super fund. And couples who are joint business owners have an even better situation.

Better get in quick
"If a husband and wife own the business, they could get $2m into super before the end of the financial year," he says. "Some people are actually taking out short-term loans to get money into super before the close off date, with the view to pay it back after the sale."

This is not the end of it.

Golden opportunity
When you throw in the lifetime limit, which permits business owners to put up to $1m into super from the sale of a business owned for 15 years, free of capital gains tax, then there is a $2m attraction to sell a business. And, if once again a couple owns the business, they are able to put $4m into super.

No need to panic
If a quick sale and taking on a loan before 30 June spooks you, don't panic.
After this date, someone could put up to $450,000 into super over a three-year period in $150,000 tranches, or do it one go. A couple could put $900,000 over a three-year period on top of their $2m lifetime limit. All up, a business couple who flog their business could get $2.9m into super - tax-free.

It couldn't be simpler
Those trying to sell property before 1 July should keep in mind that if your property is worth $1m or more, you could find yourself in a bit of a rush to finalise the sale. Remember, even after the deadline a couple can still contribute up to $450,000 each without the tax slug.

The lesson is simple - master the super rules, OK?

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