Welcome to our latest Moneta Super newsletter. We publish newsletters when we have something interesting to tell but normally no more frequently than monthly.
In this newsletter we have:
- An article on the “downsizer” contributions prepared by Monica Wang, our new Manager – SMSF Specialist Services. Given the current state of the housing markets in Australia some people may be starting to think about selling and realising equity from their current houses.
- Information about who is who in Moneta Super and their responsibilities
- Future activities by Moneta Super.
We hope you enjoy the newsletter and feel free to give us any feedback about it.
In this section we intend to bring to notice changes to SMSFs that trustees should know or simply may be useful. The amount of information will vary from lots to nothing at all but please keep a check on it. Many of the matters may be simple in concept but, invariably, will be complex in implementation. Before making any changes to your SMSF you really should discuss it with Moneta Super experts or your financial adviser.
Downsizer Contribution – Another Way to Boost Your Retirement Fund
Monica Wang, MPracAcc, BBus, CPA
Manager – SMSF Specialist Services
The Downsizer Contribution is one of the superannuation measures introduced in the 2017/2018 Budget that enables older Australians to make a superannuation contribution of up to $300,000 by each partner using the proceeds from the sale of their home.
According to recent government statistics, as of May 2021 over 22,000 Australians made downsizer contributions into the superannuation environment.
Why are downsizer contributions so popular? Let’s observe it in detail.
From 1 July 2018, if you are 65 or over, you are eligible to make a once-off tax-free downsizer contribution of up to $300,000 from the proceeds of selling your main residence.
The non-concessional contribution cap limit and restrictions on making a tax-free contribution by members with a total super balance over $1.7 million do not apply here. Furthermore, no work test or age limit apply to making a downsizer contribution.
These rules give an opportunity to Australian retirees to top up their retirement fund.
What are the eligibility requirements to make a downsizer contribution?
Firstly, the age limit. Presently you need to be aged 65 or older at the time the contribution is made. From 1 July 2022, the minimum age limit to make a downsizer contribution will reduce to 60.
Secondly, the property must be eligible. The property must be in Australia and cannot be caravans, mobilehomes or houseboats.
Importantly, the property must be your (or your spouse’s) home at some point in time, and you or your spouse need to have owned the house for at least 10 years. Despite the title of the contribution, there is no requirement that the disposal must be downsizing when making a subsequent purchase. There is no requirement to buy a subsequent new home.
If you are selling an investment property that you owned for more than 10 years, and this investment property was used as your main residence at some point in time and is eligible for a partial main residence capital gains tax (CGT) exemption, this investment property could be an eligible property.
Thirdly, the contribution amount and time. The contribution amount must be the lessor of the sale proceeds or the limit of $300,000 and must be made within 90 days of receiving the sale proceeds (usually the settlement date).
Fourthly, documentation. An ATO “Downsizer contribution into super” form must be completed and provided to your super fund before or when making the contribution.
Downsizer contribution is a once-off contribution; it is only available to a member who has not made a downsizer contribution in the past.
Other important factors to consider
If you currently receive a government age pension, proper due diligence must be conducted before considering a downsizer contribution.
Your home is usually regarded as an exempt asset for Centrelink assessment purposes. Making a downsizer contribution by selling your main residence could affect your Centrelink benefits as the contribution made to your super forms part of your assessable assets under the Centrelink Asset Test. This might affect your age pension payments.
Downsizer contribution is exempt from non-concessional contribution cap, but it increases a member’s total super balance. Once a member’s total super balance reaches $1.7 million, the member is not eligible to make any non-concessional contributions. Therefore, a well-planned contribution strategy is required to achieve the best outcome.
Please contact us or your financial adviser if you want more information.
Please note: The above information is for general information only. It should not be taken as professional advice.
Who is who at Moneta Super and what do they do…
Since the departure of Ashok Tulsiani we have become aware that some of our customers are a little confused about who they should contact with any queries, suggestions etc. So, we thought a good idea is to identify everyone connected with Moneta Super, describe what they do and to detail how to contact them. Biographical notes about all Moneta Super people can be found on our website.
Monica Wang, Manager – SMSF Specialist Services. Monica oversees the administration and compliance activities for all our clients’ SMSFs. She can be contacted by email [email protected] or telephone 03 98130133
Barbara Gough, SMSF Specialist Accountant. Barbara is well known to many of you as the ‘go to’ person with any technical queries. She looks after the administration and compliance of customers’ SMSFs. She can be contacted by email [email protected] or Tel. 03 98130133
Chris Heyworth, Director and Co-Owner of Moneta Super. Chris is currently the mastermind for developing additional SMSF services particularly in relation to estate planning, succession planning and identifying strategies that would be beneficial for trustees/directors. Chris can be contacted by email [email protected] or Mobile 0438182030
Russell Warmington, Director and Co-Owner of Moneta Super. Russell is the expert on relationships with both customers and our professional partners. He also overseas professional development, training and contributes to marketing strategies and activities. He can be contacted on [email protected] or mobile 0417389483.
Ken Maher, Co-Owner of Moneta Super. Ken has the task of maximising the use of technology for all of Moneta’s activities and particularly in relation to administrative processes and communications. He also has carriage of marketing, the website and social media. He can be contacted by email [email protected] or mobile 0419363701.
Chris, Russel and Ken are all former financial planners and co-owners of the Pentad Group and its successor, the Investment Collective. In addition, each has long and broad experience in business.
Find out more abut any of us at our website.
Although everyone has specific responsibilities as described above, all are involved in developing, planning and implementing Moneta’s service offerings, events and other activities. We believe that open collaboration is the best way of serving our customers.
Feel free to contact any of us with any queries, concerns, suggestions etc.
Events and News:
We are committed to improving the services we offer to our clients. To that end we recently held a Planning Day in which we identified a number of process we can improve, and importantly, some services we can enhance and activities and events we can introduce. We will be working on these continually and we will make announcements when appropriate by email, on our website and in newsletters so, as they say in the classics, “Watch this space”.
Moneta Super provides a quality and proactive SMSF Administration service. Like all businesses, our customers come and go so we need to replace those that go and ideally, grow our business to ensure that it can continue to provide a top quality service.
The best newcustomers are those referred to us by you, our existing customers. We will appreciate you mentioning us to your friends and associates when discussing SMSF administation services.
Moneta Super is a privately owned and independent Self Managed Superannuation Fund administration service and located in Camberwell, Victoria. Information about its owners can be read here.
It is independent in that it has no form of ownership, sponsorship or other arrangements with other businesses or organizations. It has no contractual arrangements with other individuals, companies or other organizations that can limit its independence.
Moneta Super does not have an Australian Financial Services Licence and therefore it cannot advise on the suitability of SMSFs for customers nor can it advise on the suitability of any strategies that might be beneficial for trustees and members. However, it can inform trustees about strategies that may be possible but stresses that trustees should seek the advice of a properly qualified and licenced Financial Planner beforeo making any decisions of this nature.
We have not considered any personal objectives and any information in our newsletters should be considered as general advice and not personal advice. Further, any information should not be solely relied-upon for decisions; consulations should be had with properly qualified and licenced advisers.
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