Extra super contributions using work test exemption 01 Jun 2020

Blog / SMSF


From 1 July 2019, recent retirees aged 65 to 74 with a TSB below $300,000 at the previous 30 June are eligible to make voluntary super contributions for an extra financial year, where they have met the work test in the previous financial year. The work test exemption is a once in a lifetime exemption and can only be used in one financial year.

The work test exemption provides a number of important planning opportunities for members with low super balances, such as:

•    allowing an individual to make extra contributions when selling an investment property close to retirement.
•    providing one extra year for eligible members to implement the withdrawal and re-contribution strategy for estate planning 
     purposes.
•    deferring the sale of a CGT asset with a large capital gain (such as an investment property) to a new financial year
     following the year in which the member retires. Selling the CGT asset in the new financial year (where the individual no
     longer has employment income) could result in lower tax payable on the taxable capital gain and the work test exemption
     could still allow the sale proceeds to be contributed to super.



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Disclaimer and Warning
The information above is of a general nature only.  It should not be used as a source to make financial decisions.  It's also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status.  We recommend that if you are looking for advice on this matter, you should contact us.


 


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