CGT is assessed by adding the net gain \u2013 after adjustments and the 50 per cent discount \u2013 to your taxable income in the year the contract for sale is signed. Therefore, you should aim to have your income as low as possible in that year.<\/p>\n
One way to do this is to defer the sale until a year when you\u2019ll be in a lower tax bracket \u2013 for example, after retirement \u2013 or to reduce your taxable income by making a tax-deductible contribution to super.<\/p>\n
The limit on tax-deductible contributions (concessional contributions) is $30,000 a year, which includes the employer contribution. However, if your superannuation balance was under $500,000 at June 30 in the previous financial year, you may be able to use catch-up contributions.<\/p>\n
You need to take expert advice because there are potentially large sums of money involved. The maximum catch-up contributions would be $137,500 \u2013 but this would only apply if there have been no concessional contributions made in the past five years. In addition to the standard $30,000 cap for this financial year, the total concessional cap could be as high as $167,500.<\/p>\n
We are a couple that now receive a part age pension with combined assets of about $800,000. If one of us passes away and the other inherits the full $800,000, it appears the surviving spouse may lose pension eligibility due to the higher single person\u2019s asset test threshold.<\/p>\n
Would it be possible to include in both our wills a clause to leave, say, $300,000 directly to our children (instead of the surviving spouse) so that the remaining spouse\u2019s asset level drops to $500,000 and they remain eligible for a part pension? Or would Centrelink treat this $300,000 as a gift and still count it against the surviving spouse\u2019s assets?<\/p>\n
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Centrelink does not treat assets left directly to your children via your will as a gift from the surviving spouse. In other words, if the deceased spouse\u2019s will directs that $300,000 go straight to the children, and the remaining $500,000 goes to the surviving spouse, Centrelink will only assess the $500,000 received by the survivor.<\/p>\n
This is very different from giving money away during your lifetime, which is assessed under Centrelink\u2019s gifting rules which limits gifts to $10,000 a year with a $30,000 cap over five years.<\/p>\n
So yes, it is absolutely legitimate to structure your wills so that part of your estate goes directly to your children to help keep the survivor\u2019s assets below the pension thresholds.<\/p>\n
Of course, this should be balanced carefully with the needs and wishes of the surviving spouse, and a solicitor should help draft the wills to make this work cleanly.<\/p>\n
I started a 24 -month term deposit in January with interest accumulating until the deposit matures in January 2027. The company reported the interest earned to June 30 to the ATO for inclusion in my tax return, even though I won\u2019t receive the interest until maturity. Is the un-received interest taxable as reported? I have never heard of this, and I\u2019m just checking that it\u2019s correct.<\/p>\n
I\u2019ve discussed this with my accountant and a couple of deposit takers, and they all assure me that incorporating the interest annually is the normal practice. I notice this is happening in my own term deposits.<\/p>\n