I had no idea where my lost super was or the names of the funds. I just new it was scattered everywhere and I should definitely have more than $3,000 in my super. Australian Super Finder found all 7 of my funds and now my balance is almost $50,000. Thank you so much for getting my super back on track. ? Leonie, Thomastown VIC

Super Facts and Tips

Non-Concessional (After-tax) Contributions: Re-Contribution Strategy Still Applies

Discussed here are vital things for you to know about after-tax contributions or re-contribution strategy.

Tax-exempt component is tax-free

Background: Superannuation benefits can be made up of two elements: tax-exempt element and taxable components. The tax-exempt element is always tax-free despite the age you take your superannuation benefits and irrespective of whether you leave the benefits to people who are considered as non-dependents or dependents under the tax laws.

A benefitís taxable part might go through tax which varies according to whether you take the benefit after or before reaching 60 years old, or, by youíre the moment of passing, once you leave the super benefits to an individual whoís a non-dependent under the law.

If a person passes away and leaves benefits to an individual whoís deemed as a non-dependant under the law, for example, a financially independent adult child, then tax is typically payable on the death benefitís taxable element.

A technique to reduce this tax when leaving benefits to adult kids is to enhance the tax-exempt component of a benefit via making after-tax (non-concessional) contributions immediately before starting a pension, which then enhanced the tax-exempt component of the account balance.

For non-concessional contributions, the $540,000 bring-forward cap stays in place (2015/2016 year), and currently, the federal government doesnít have plans to reduce this limitation, though the federal government is assessing the tax system. If not already, itís worth terminating being a subscriber to the free month-to-month newsletter, to remain updated on any changes, particularly with the election in 2016.

This article explains how the $540,000 cap (offered to below-65s) operates.

Improving the Tax-Exempt Element

Most people would ask if they can still use the re-contribution method to improve their tax-free element.

In general, yes, presuming the individual has pleased a release condition that enables them to gain access to superannuation advantages, like retiring, or reaching 65 years old, or commencing a TRIP (transition-to-retirement pension) or turning 60 and terminating an employment plan.

You have to meet a couple of other conditions when getting money that you want to re-contribute, which implies that anybody considering such a strategy must constantly assess the treatment with their SMSF service provider or adviser, or discover an SMSF expert or a superannuation specialist, for suggestions.

All information on this website is of a general nature only. We have not taken into account your financial situation, needs or objectives. You need to make up your own mind and ascertain yourself if it is right for you. We recommend you read the product disclosure statement(s) and the financial services guide before making any financial decision.

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