Monthly Musings

Here is our “Monthly Musings” for the month of April. In this edition we will observe the market movements for the month, showcase a brand new episode of our short video series “3 Minute Tech” where we discuss planning for the upcoming End of Financial Year, and present an overview in our Focal Point section that provides an End of Financial Year Checklist.

As always, we hope you enjoy.

End of Financial Year Checklist

The End of Financial Year (EOFY) is once again fast approaching – providing an opportunity to review your position ahead of the new year to come. Given the inevitable June end rush, as well as processing and cut-off times, we believe it prudent to consider important actions in advance of deadlines. The following is an outline of key planning strategies that may require review. However, this may not cover all of your EOFY planning requirements – where appropriate please consult with your accountant or licenced tax adviser.

Monthly Musing

Here is our “Monthly Musings” for the month of March. In this edition we will observe the market movements for the month, showcase a brand new episode of our short video series “3 Minute Tech” where we discuss “Personal Insurances”, present an update in our Focal Point section surrounding the important superannuation “Minimum Pension Payments”, and provide a great video insight into the Entrust Wealth Management Team.

As always, we hope you enjoy.

Minimum Pension Payments

As part of the government’s response to the financial impacts of COVID-19, a temporary reduction to the minimum pension drawdown requirements were implemented. During the previous four financial years, minimum drawdown rates were halved. This is the first financial year since 2018/19 that minimum pension payments return to their normal calculations.

Contribution Caps

Outside of relying on investment returns, the best way to ensure that your retirement assets grow over time is through superannuation contributions. There are two main types of contributions – concessional and non-concessional. Following the release of Average Weekly Ordinary Time Earnings (AWOTE) data, the required increase has occurred such that the contribution caps will be lifted from 1 July 2024.

Concessional Contributions

As we move closer to the end of the financial year, attention often turns towards personal tax planning. This is where the use of concessional contributions and even carry forward concessional contributions can be particularly useful. With income tax cuts beginning 1 July 2024 on the horizon, the flexibility afforded with the current rules are discussed within the below.

Gifting

A query that surfaces occasionally comes to gifting money to adult children. It is common for people to be aware that there are certain rules surrounding gifting, but it is important to note that the limits don’t necessarily apply to all situations.

Non-Concessional Contributions

When it comes to building up assets within superannuation, most people acknowledge that their regular employer contributions do a large portion of the work. Separate to this, non-concessional contributions can also provide significant opportunities. The important rules associated with making non-concessional contributions are highlighted below.

Superannuation Contribution Splitting

In a perfect world, the superannuation balances of spouses would be fairly evenly matched, but often due to differences in work histories this isn’t the case. Fortunately, there’s a way to help equalise balances with a strategy known as superannuation Contribution Splitting.

Reducing Death Benefits Tax in Superannuation

Superannuation law sets out who a death benefit is payable to, whilst taxation law sets out how a death benefit is taxed. Death benefit tax can apply if superannuation is paid to a non-tax dependant. This means that when adult children inherit your superannuation, they will likely have tax to pay. To reduce this potential liability, many consider the use of a re-contribution strategy.