You might want to top up your spouse’s superannuation for plenty of reasons.
Maybe you’ve accumulated more super than they have and want to even things out for retirement. Or perhaps your spouse is older and you’re keen to access those funds sooner. Maybe they had to take a career break, and you want to keep their balance up.
Whatever the motivation, it’s helpful to know that the super system allows for this kind of strategic planning – but there’s a deadline to keep in mind.
Under current superannuation rules, you have until 30 June to instruct your fund to roll over up to 85% of your previous year’s concessional contributions into your spouse’s super account.
Concessional contributions include any super contributions your employer makes and any personal contributions you’ve made and claimed a tax deduction for. When transferring these to your spouse, you can only move up to 85% of the amount, because a 15% contributions tax has already been deducted.
Even if you’ve used the carry-forward concessional contributions rule to make a larger deductible contribution in a particular year, you can still split 85% of the total amount you claimed a deduction for. It’s a handy strategy, especially if one partner is behind on their super savings.
But, notably, this isn’t a once-off opportunity. You can keep doing it each year until your spouse turns 65.
Important Things to Keep in Mind
Not all super funds support contribution splitting unless your spouse is also a member of the same fund. So it’s essential to check with your provider to see if they allow spouse contribution splitting, and to request the relevant forms or procedures.
If you have a self-managed super fund (SMSF), it’s much easier – we can handle the whole process for you.
Want to know more about superannuation before the end of financial year? Why not speak with your LT licensed adviser about the subject?
Disclaimer
The information contained in this publication is for general information purposes only, professional advice should be obtained before acting on any information contained herein. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.