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This is a guide to discuss with your financial adviser to ensure the recontribution strategy is suitable for your personal financial and life circumstances. It does not constitute financial advice and is generic in nature.

1. Assessment and suitability

Begin by speaking with your financial professionals for them to evaluate whether the recontribution strategy is suitable for your retirement and estate planning needs. They will analyse your current super balance and projected retirement needs.

2. Understand the rules

Familiarise yourself with the ATO Interpretive Decision 2015/23 and Tax Ruling 2010/1.

Ensure you’re compliant with the regulations about actual money or asset movement, not just journal entries.

3. Determine the withdrawal amount

With your adviser, decide on the amount to be withdrawn from your super fund. Consider the potential impact on your total super balance (TSB) and future contribution limits.

4. Execute the withdrawal

Initiate the withdrawal process. Ensure this is done in real terms (actual movement of funds/assets) and not merely as a journal entry. If aiming for a lower TSB in the following financial year, ensure this is done before 30 June.

5. Recontribute the amount

Once the funds have been successfully withdrawn, initiate the process of recontributing them into the super fund.

Remember the Pitts v Federal Commissioner of Taxation [2017] AATA 685 ruling that even same day transactions can be considered valid.

6. Decide on account structure

Assess if you want to contribute back into the same super account or create a separate super interest. Consider the potential tax savings against the possible increase in administrative complexity and costs.

7. Regular monitoring

Continuously monitor the super fund’s performance and any changes in regulatory guidelines that could impact the recontribution strategy. Reassess the strategy’s viability annually or whenever there’s a significant change in your financial situation.

8. Stay updated with your TSB

Keep track of your TSB annually, especially around the 30 June mark. This will inform future withdrawals and recontributions, ensuring you maximise contribution opportunities.

9. Consult and review

Regularly consult with your adviser, ensuring you understand how to stay updated on your super fund’s status and any changes made due to the recontribution strategy.

Seek feedback and request to make necessary adjustments as required.

10. Documentation

Your adviser should maintain meticulous records of all transactions, decisions and consultations with you. This will not only ensure compliance but also provide clarity on the strategy’s effectiveness over time.

11. Seek expert advice

Always stay connected with a financial adviser or tax expert. Their insights can be invaluable in navigating the complexities of super fund regulations and optimising the recontribution strategy.

Remember, while the recontribution strategy can offer advantages, it is essential to always align with your overall financial goals and adhere to regulatory guidelines.

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Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. © 2023