Tax Effective Superannution Splitting
Super splitting could save $21,000 in tax:
Now that the strategy of Super Splitting has been introduced, clients need to be aware of the enormous impact it may have on your future super accounts.
Some super fund managers are claiming that taking full advantage of the new rules could save couples up to $21,000 in tax.
On one of our recent seminars, Stephen explained that by utilising the tax-free threshold benefit twice, by withdrawing two smaller amounts rather than one combined lump sum, couples could save a bundle.
Couples can access two tax-free thresholds, they can also take advantage of two reasonable benefit limits (RBLs), which is the amount people can take out of super with tax concessions.
Super splitting could also be useful where couples superannuation balances are uneven and one partner is close to breaking their RBL. The new rules open up a world of opportunity for low income earners and non-working spouses, quite often women.
The new rules also offer advantages in regards to accessing pension benefits and reducing income tax in retirement, Nicholas added.
Having two income streams will help couples reduce the amount of income tax they pay. For example, if a person receives a retirement income stream of $50,000 they would pay more marginal tax than if they received two incomes of $25,000.
The splitting rules apply to contributions made from 1 January 2006 and couples can apply to split super at the end of each financial year.
Contact our office on 03 9866 2400 or email at admin@amazon.net.au for further information on how this strategy can help you.
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