Another option is to wait until your husband has a zero taxable income and make the transaction then.
Even if he could not make contributions to super, the total tax on the capital gain of $100,000 after discount would be about $25,000. The issue to consider here is whether the asset will gain significantly in value in that time.
I am 71 and my spouse is 64 and we are both in pension-phase super. We have built up some money outside of super and stand to lose our franking credits on those investments. My super balance is lower than hers. My taxable income from investments is less than $40,000. Could my wife make annual spouse contributions for me to my super fund and, if so, how much? Will the tax offset apply? We would be looking to make an annual spouse contribution of at least $100,000, perhaps $200,0000, bearing in mind the contribution caps.
Your wife cannot make a spouse contribution for you but, even if she could, the maximum would be $3000.
As she is under 65, she could make a non-concessional contribution of $100,000 for herself, or by using the bring forward rules, make a bigger one.
Just keep in mind that Labor has promised to reduce the non-concessional cap to $75,000.
If you do sell shares to fund superannuation contributions, there may be capital gains tax to pay on the sale of those shares.
I have a SMSF which pays me a pension made up from my pension and my deceased husband’s reversionary pension, plus a small amount in accumulation. Due to age, I am considering transferring this to an industry or retail fund. Would this have adverse tax results? I am 75.
There should be no adverse tax consequences for what you propose, but it is possible that you could lose grandfathering, which could affect your eligibility for the Commonwealth Seniors Health Card.
Of course, this may not apply to you. As this is a self-managed super fund, make sure you get advice to ensure all documentation is completed properly.
I am 74 and retired. I have $588,476 in my income stream account and $134,020 in my accumulation account – both in industry funds. Should I maintain both accounts? What are the benefits and disadvantages?
Money in pension mode enjoys a zero-tax rate, but you are required to draw a minimum pension each year.
In contrast, money in accumulation mode pays 15 per cent per annum income tax but there is no requirement to make any withdrawals.
If the funds listed are your main financial assets, I suggest you take advice about withdrawing the money from the accumulation account and investing it in your own name. It should then be tax-free, with no requirement to make any withdrawals.
Could you explain further your recent comment about Labor proposing to bring in a reduction in threshold where the 30 per cent contribution tax cuts in, to $200 000. Also is this retrospective?
There is now a 30 per cent tax on concessional contributions for people whose adjustable taxable income exceeds $250,000 a year.
It is Labor policy to have this tax apply for people whose income exceeds $200,000 a year. I doubt that it would be retrospective.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance.
Noel Whittaker, AM, is the author of Making Money Made Simple and numerous other books on personal finance.