April 2025

As we move into April, and hot on the heels of the recent Federal Budget, Prime Minister Anthony Albanese has announced a national election for May 3 – kicking off an April campaign centred on tax cuts and cost-of-living relief. 

Meanwhile fears of inflation in the United States and alarm about unpredictable and escalating tariffs saw sharp falls on Wall Street during March, particularly in the final week.

In Australia, the events in the US, conflicts in Ukraine and the Middle East and the start of the federal election campaign have all made their mark. The S&P/ASX 200 reacted with an almost 5% drop during March.

The Australian dollar, in the doldrums all year, improved slightly during the month before ending lower at around 63US cents.

Economic growth was up 0.6% in the December quarter and 1.3% for the year and household wealth climbed 0.9% in the same period. Inflation rose 2.4% in the 12 months to February, a slight softening from the previous month’s increase of 2.5%.

Consumer sentiment recorded a 4% rise in March, according to the Melbourne Institute and Westpac Bank Sentiment index. The RBA’s decision to cut interest rates in February and a further easing in cost-of-living pressures have provided a clear lift.  

Digital and skills tax incentives return

The Government has opened submissions for a 120 percent deduction for tech and training investment, bringing previous Federal Budget announcements one step closer to becoming reality.

Business leaders have applauded the move to legislate two measures that will allow organisations with turnover under $50 million to claim spending on digital solutions and training backdated to March.

The measures, dubbed the Small Business Technology Investment Boost and the Small Business Skills and Training Boost were announced as initiatives by the previous Government in its March Federal Budget and have now been released as draft legislation for introduction into Parliament later this year.

In a joint announcement by Treasurer Jim Chalmers, Small Business Minister Julie Collins and Assistant Treasurer Stephen Jones, the tax incentives were described as a way to ease the burden of upskilling for small businesses.

“The Government recognises that training employees is expensive and takes time, both of which are at a premium when employers are trying to run a small business,” the ministers said.

“These measures will make it easier for small businesses and help them recoup some of the costs of the investments they make in their employees and digital operations.”

The Small Business Technology Investment Boost

Under the proposed legislation, the boost offers a bonus 20 percent deduction on business expenditure relating to support digital operations.

What can a small business deduct?

At this stage the scope for claiming the digital boost is broad, covering anything that supports the digitisation of operations as well as ongoing investments of a digital nature, such as software licenses, subscriptions and related hardware.

However, the digital tax boost only applies on expenditure up to $100,000 in total, making the maximum deduction available to small businesses $20,000.

When does it apply?

Currently, the digital boost applies to expenses incurred from 7.30pm on 29 March 2022 through to 30 June 2023.

What isn’t included?

Several types of expenditure aren’t covered by the boost, such as:

• Salary and wages
• Capital works that can be deducted under Division 43 of ITAA 1997
• Financing
• Training and education (however, these may be covered by the skills and training boost)
• Spending associated with the trading of stock

For further information, you can find the draft legislation and explanatory materials for the Technology Investment Boost on the Treasury website.

The Small Business Skills Investment Boost

Similar to the tech boost, the Skills Investment Boost enables an additional 20 percent deduction on small business spending on external training and education of staff.

What can a small business deduct?

According to the draft legislation, the incentive applies to any training for employees conducted in Australia or online, however the expenditure must be charged by a Registered Training Organisation.

The training must also be already deductible under tax law and can’t be offered by the business (or an associate of the business) that is claiming the deduction.

When does it apply?

The skills boost will also be backdated to March, applying from 7.30pm 29 March 2022 and is set to continue to 30 June 2024.

For more details on the Skills Investment Boost, you can find the draft legislation as well as explanatory materials on the Treasury website.

Budgetary win for business

With the new Government set to hand down a second Federal Budget in October, the announcement of these initiatives is being seen as a positive move by business leaders around the country.

And, with MYOB modelling suggesting that nearly half a million Australian small businesses have little to no engagement with digital tools, both initiatives are likely to have a big impact.

“Businesses with meaningful engagement with digital are 50 percent more likely to grow revenue,” said MYOB CEO Greg Ellis.

“They’re eight times more likely to create jobs. They are 14 times more likely to come up with new products or services.

“Productivity is what Australia needs; making sure every business is a digital business needs to be one of our top priorities,” he said.

The sentiment was echoed in a statement from Council of Small Business Organisations Australia CEO Alexi Boyd.

“It is essential to incentivise digitisation to make our small businesses stronger, more productive, and more resilient to future economic shocks.”

Meanwhile, Australian Small Business and Family Enterprise Ombudsman Bruce Billson pointed to more specific benefits.

“The digital tax break will allow [businesses] to invest in items such as cyber security systems, cloud-based services, accounting or eInvoicing software, hardware such as laptops and portable payment devices.

“For a small business, the cost of training staff can be quite significant, and this deduction will support owners to make an investment in upskilling staff to drive productivity and competitiveness.”

The draft legislation for both initiatives is open for consultation until 19 September.

Source: MYOB August 2022

Reproduced with the permission of MYOB. This article by Campbell Phillips was originally published at https://www.myob.com/au/blog/digital-and-training-tax-incentives-return/

Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.

Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

How political events affect the markets

From the economy bending policies of Trump 2.0 to the growing strength of the far right in Europe, the new alliance between Russia and the United States, the wars in Ukraine and the Middle East, and the US President’s vow to upturn world trade rules, the markets are certainly navigating tricky times.

In recent months we’ve seen volatility in some areas but cautious optimism in others in a reflection of the hand-in-glove relationship between politics and markets.

Of course, economic policies, laws and regulations– think tax increases or decreases, new business regulations or even referendums – have a big effect on how investors allocate their portfolios and that impacts market performance.

In 2016, when the United Kingdom voted to leave the European Union, the UK pound plunged and more than US$2 trillion was wiped off global equity markets.ⁱ

In the following four years until Brexit was finally achieved in 2020, the FTSE 100 performed poorly compared to other markets as domestic and international investors looked elsewhere to avoid risk. While it has risen since a massive drop during the coronavirus pandemic, the exodus of companies from the London Stock Exchange continues with almost 90 departures in 2024.ⁱⁱ

Interest rate movements and any hint of political instability can also bring about a sell off or a rally in prices, with companies holding off on capital investment and causing economic growth to slow.ⁱⁱⁱ

Global oil prices rose 30 per cent in 2022 when Russia invaded Ukraine causing European stock markets to plunge 4 per cent in a single day.^iv Since then, oil prices have fluctuated and are now back to pre-war levels and gold has reached new heights as investors globally look for a safe haven from high geopolitical risks.

Do elections have an effect?

Elections, which almost always cause market disruptions during the uncertainty of the campaign period and shortly after the vote is known, have featured strongly in the past six months or so.

A review of 75 years of US market data has found that, while there may be outbursts of volatility in the lead up to the vote, there’s minimal impact on financial market performance in the medium to long term. The data shows that market returns are typically more dependent on economic and inflation trends rather than election results.^v

Nonetheless, the noisy 2024 US Presidential campaign saw some ups and downs in markets during the Democrats’ upheaval and the switch to Kamala Harris as candidate. Donald Trump’s various policy announcements on taxes, immigration, government cost cutting and tariffs both buoyed and dismayed investors.

Analysis by Macquarie University researchers of the three days before and after election day found significant abnormal returns in US equities immediately after the vote.^vi

But the surge was short-lived as investor sentiment fluctuated. Small cap equities with more domestic exposure experienced the highest returns while the energy sector also saw substantial gains, in anticipation of regulatory changes.

While currently the S&P500 and the Nasdaq have both gained overall since the election, there’s been extreme share price volatility.

How Australia has fared

Meanwhile, any impact on markets ahead of Australia’s upcoming federal election  has so far been muted thanks to the volume of world events.

The on-again off-again US tariffs are causing more concern here for both policymakers and investors. Tariffs on our exports could mean higher prices and a drop in demand for our goods and services, leading to economic uncertainty.

In early February, the Australian share market took a dive immediately after President Trump’s announcement of tariffs on Mexico, Canada and China, wiping off around $50 billion from the ASX 200. They recovered slightly only to fall again later as the Reserve Bank cut interest rates. In the US, some tech companies delayed or cancelled their listing plans because of the volatility and uncertainty caused by the announcements.^vii

Amid a turbulent start to 2025, most economists agree the markets are unlikely to hit last year’s 7.49 per cent achieved by the S&P ASX 200.

Reserve Bank of Australia governor Michele Bullock is similarly downbeat on the prospects for the year, saying uncertainty about the global outlook remains “significant”.^viii

Please get in touch if you’re watching world events and wondering about the impact on your portfolio.

i Post-Brexit global equity loss of over $2 trillion worst ever -S&P

ii London Stock Exchange suffers biggest exodus since financial crisis

iii Policy Instability and the Risk-Return Trade-Off | St. Louis Fed

iv Why Financial Markets Are Sensitive to Political Uncertainty

v How Presidential Elections Affect the Stock Market | U.S. Bank

vi 2024 presidential election: U.S. equities surged, then retreated, after Trump’s victory

vii They’ve Been Waiting Years to Go Public. They’re Still Waiting. – The New York Times

viii Statement by the Reserve Bank Board: Monetary Policy Decision | Media Releases | RBA

Sowing the seeds of succession

Succession planning can be difficult at the best of times without dealing with the added pressures farmers need to face including droughts, fires and floods.

And that’s why it is even more important to plan early and get it right when you are on the land. You are not just dealing with a business, but invariably also with a home.

Some 99 per cent of the 135,000 farms in Australia are family owned with the average age of farmers being 52.ⁱ It is believed that farmers are five times more likely than other Australians to be working beyond the age of 65. There are a variety of reasons for this, from a reluctance to relinquish control, to a lack of family willing to take over the reins and financial necessity.

Given the physicality of farming, it would seem to make a lot more sense to start thinking about succession planning well before that stage.

Often such planning is put into the too hard basket because there are so many variables to consider. But this will not solve the problem, so it’s better to get good advice and get it early.

Start talking

The first thing you need to do is open the doors of communication. Arrange a time to talk with your family to discuss:

• Who wants to inherit and work on the farm and who wants to leave the property
• Whether they agree each child should be treated equally or accept that the one inheriting the farm should receive preferential treatment
• How everybody feels about splitting the property between siblings, or
• The way forward if none of your children wants to stay on the land.

These are all considerations that need to be addressed and revisited over time to ensure they meet with everybody’s wishes.

If just one of the children wants to remain on the property, will they need to find the finance to pay out the other siblings? If so, then the next decision is how that finance will be found.

Perhaps the answer is to transfer the property before you die. If that is the case, then where will you live in retirement and what will be your source of income once you retire? Again, you need to examine the options. Perhaps you may receive an ongoing income from the property, or maybe find income from other investments. Importantly, you also need to revisit these options over time to ensure they still work for you.

One danger of not having a succession plan and working well beyond your best years, is that you can run the farm into the ground and make it a far less attractive property to sell.

Structure your plans

There are so many questions to ask and what is right for one family, may not be right for another.

But once you determine how you want to move forward, you then need to examine the best structures to put in place to make the process as efficient as possible. Some of the key advice you may need is on tax, trusts and land ownership and the intersection of all three.

Tax is particularly important as you want to avoid or at least minimise capital gains tax (CGT).

If you are 55 years of age or more and retiring and have owned your property for at least 15 years, then you may qualify for the small business 15-year CGT exemption on your entire capital gains. Other concessions may apply if you don’t qualify the 15-year exemption.

For couples where the family farm is held in their own name, perhaps you might want to consider a joint tenancy agreement as it leads to automatic transfer of ownership if one dies.

Or you might consider putting the farm into a family trust or perhaps holding it as an asset in your self-managed super fund. There are so many what-ifs to consider when it comes to rural properties. If you want to discuss how to move forward on your estate and succession planning and what will work best for you, then give us a call.

i https://www2.deloitte.com/au/en/pages/consumer-business/articles/succession-family-farm.html

Navigating turbulent times in the share market

As investors grapple with uncertainty, keeping a cool head has never been more important.

“Time in the market, not timing the market” is a popular investment philosophy that emphasises the importance of staying invested over the long term rather than trying to predict short-term market movements. While markets can be volatile in the short term, historically, they tend to grow over time.

It’s a strategy that helps you avoid getting caught up in short-term market fluctuations or trying to predict where the market is heading.

With the recent market turbulence, from the global effects of US President Donald Trump’s administration to ongoing conflicts in Ukraine and the Middle East, savvy investors look beyond the immediate chaos to focus on strategies that encourage stability and growth over the long-term.

It’s a hallmark of the approach by the world’s most high-profile investor, Warren Buffet, who argues that short-term volatility is just background noise.

“I know what markets are going to do over a long period of time, they’re going to go up,” says Buffet.ⁱ

“But in terms of what’s going to happen in a day or a week or a month, or even a year …I’ve never felt it was important,” he says.

Buffet first invested in the sharemarket when he was 11 years old. It was April 1942, just four months after the devastating and deadly attack on Pearl Harbour that caused panic on Wall Street. But he wasn’t fazed by the uncertain times.

Today Buffet is worth an estimated US$147 billion.ⁱⁱ

Long-term growth in Australia

While growth has been higher in the US, investors in Australian shares over the long-term have also fared well. For example, $10,000 invested 30 years ago in a basket of shares that mirrored the All Ordinaries Index would be worth more than $135,000 today (assuming any dividends were reinvested).ⁱⁱⁱ

And it’s not just the All Ords. If that $10,000 investment was instead made in Australian listed property, it would be worth almost $95,000 today or in bonds, it would be worth almost $52,000.

In real estate, the average house price in Australia 30 years ago was under $200,000. Today it is just over $1 milllion.^iv

Meanwhile, cash may well be a safe haven and handy for quick access but it is not going to significantly boost wealth. For example, $10,000 invested in cash 30 years ago would be worth just $34,000 today.^v

Diversify to manage risk

Diversifying your investment portfolio helps to manage the risks of market fluctuations. When one investment sector or group of sectors is in the doldrums, other markets might be firing therefore reducing the chance that a downturn in one area will wipe out your entire portfolio.

For example, the Australian listed property sector was the best performer in 2024, adding 24.6 per cent for the year. But just two years earlier, it was the worst performer, losing 12.3 per cent.^vi

Short-term investments – including government bonds, high interest savings accounts and term deposits – can play an important role in diversifying the risks and gains in an investment portfolio and are great for adding stability and liquidity to a portfolio.

Ongoing investment strategies

Taking a long-term view to accumulating wealth is far from a set-and-forget approach and by staying invested, you give your investments the best chance to grow, avoiding the risks of missing out on key growth periods by trying to time your buy and sell decisions perfectly.

Reviewing your investments regularly helps to keep on top of any emerging economic and political trends that may affect your portfolio. While it’s important to stay informed about market trends, it is equally important not to overreact when there is volatility in the share market.

Emotional investing can lead to poor decisions, so remember the goal is not to avoid market declines but to remain focussed on your overall long-term investment strategy.

Please get in touch with us if you’d like to discuss your investment

i Warren Buffett: The Truth About Stock Investing

ii Bloomberg Billionaires Index – Warren Buffett

iii, v, vi Vanguard Index Chart | Vanguard Australia Personal Investor

iv The Latest Median Property Prices in Australian Cities

What are tariffs?

Thanks to the decisive victory of US President-elect Donald Trump, we’re now set to hear a whole lot more of his favourite word.

It’s something of a love affair. On the campaign trail in October, he said:

To me, the most beautiful word in the dictionary is tariff.

Previously, he’s matched such rhetoric with real policies. When he was last in office, Trump imposed a range of tariffs.

Now set to return to the White House, he wants tariffs of 10-20% on all imports to the US, and tariffs of 60% or more on those from China.

Most of us understand tariffs are some kind of barrier to trade between countries. But how exactly do they work? Who pays them – and what effects can they have on an economy?

What are tariffs?

An import tariff – sometimes called an import duty – is simply a tax on a good or service that is imported into a country. It’s collected by the government of the country importing the product.

How exactly does that work in practice?

Imagine Australia decided to impose a 10% tariff on all imported washing machines from South Korea.

If an Australian consumer or a business wanted to import a $1,200 washing machine from South Korea, they would have to pay the Australian government $120 when it entered the country.

So, everything else being equal, the final price an Australian consumer would end up paying for this washing machine is $1,320.

If a local industry or another country without the tariff could produce a competing good at a similar price, it would have a cost advantage.

Other trade barriers

Because tariffs make imports more expensive, economists refer to them as a trade barrier. They aren’t the only kind.

One other common non-tariff trade barrier is an import quota – a limit on how much of a particular good can be imported into a country.

Governments can also create other non-tariff barriers to trade.

These include administrative or regulatory requirements, such as customs forms, labelling requirements or safety standards that differ across countries.

What are the effects?

Tariffs can have two main effects.

First, they generate tax revenue for the government. This is a major reason why many countries have historically had tariff systems in place.

Borders and ports are natural places to record and regulate what flows into and out of a country. That makes them easy places to impose and enforce taxes.

Second, tariffs raise the cost of buying things produced in other countries. As such, they discourage this action and encourage alternatives, such as buying from domestic producers.

Protecting domestic workers and industries from foreign competition underlies the economic concept of “protectionism”.

The argument is that by making imports more expensive, tariffs will increase spending on domestically produced goods and services, leading to greater demand for domestic workers, and helping a country’s local industries grow.

Swapping producers isn’t always easy

Tariffs may increase the employment and wages of workers in import-competing industries. However, they can also impose costs, and create higher prices for consumers.

True, foreign producers trying to sell goods under a tariff may reduce their prices to remain competitive as exporters, but this only goes so far. At least some of the cost of any tariff imposed by a country will likely be passed on to consumers.

Simply switching to domestic manufacturers likely means paying more. After all, without tariffs, buyers were choosing foreign producers for a reason.

Because they make selling their products in the country less profitable, tariffs also cause some foreign producers to exit the market altogether, which reduces the variety of products available to consumers. Less foreign competition can also give domestic businesses the ability to charge even higher prices.

Lower productivity and risk of retaliation

At an economy-wide level, trade barriers such as tariffs can reduce overall productivity.

That’s because they encourage industries to shift away from producing things for which a country has a comparative advantage into areas where it is relatively inefficient.

They can also artificially keep smaller, less productive producers afloat, while shrinking the size of larger, more productive producers.

Foreign countries may also respond to the tariffs by retaliating and imposing tariffs of their own.

We saw this under Trump’s previous administration, which increased tariffs on about US$350 billion worth of Chinese products between 2018 and 2019.

Several analyses have examined the effects and found it was not foreign producers but domestic consumers – and especially businesses relying on imported goods – that paid the full price of the tariffs.

In addition, the tariffs introduced in 2018 and 2019 failed to increase US employment in the sectors they targeted, while the retaliatory tariffs they attracted reduced employment, mainly in agriculture.

Economists’ verdict

Tariffs can generate tax revenue and may increase employment and wages in some import-competing sectors. But they can also raise prices and may reduce employment and wages in exporting sectors.

Do the benefits outweigh the costs? Economists are nearly unanimous – and have been for centuries – that trade barriers have an overall negative effect on an economy.

But free trade does not benefit everyone, and tariffs are clearly enjoying a moment of political popularity. There are interesting times ahead.

Source: https://theconversation.com/what-are-tariffs-243356

The challenges of market timing

When markets fall, it’s natural to want to take action to prevent further losses. Doing so however can do more harm than good. Here’s why timing the market to buy low and sell high is not as easy as it sounds.

If you’re invested in the financial markets and also keeping up with the news, you’re probably wondering if you should do anything to insulate your portfolio from incurring further losses alongside rising interest rates and inflation.

In times like these, reminding investors to “maintain discipline” and “stay the course” – in other words, stay invested and here’s why:

Reacting to the here and now

Most market commentary are about the events of the day, with a focus on the here and now. However, the ‘today’ is not as significant to financial markets as they’re generally forward looking and more concerned about what will happen in the future. Thus, using daily developments to make constant adjustments to your portfolio is unlikely to help you accumulate wealth over the long term as the market will have already priced it in.

Additionally, to successfully time the market, investors need to get all five of these investment factors right including precisely timing exit and re-entry – a near impossible feat for even the most experienced of investors.

Locking in your losses

When markets fall, it’s natural to want to sell riskier assets (i.e. equities) and move to cash or safer assets like government securities. But exiting the share market now means locking in your losses permanently and not giving your portfolio the opportunity to benefit when markets recover. Research found that 80 per cent of investors who panicked and moved to cash during the 2020 sell off would have been better off if they had stayed invested¹.

Investing at the peak

While we all want to “buy low and sell high” so our portfolios can outperform the market average, in reality, it is extremely hard to execute perfectly every single time. Analysis of the last 5 decades reveals that even in the worst-case scenarios – where investors bought into the market at its peak, just before a dip – as long as investors stayed invested instead of moving to cash, they still benefited from positive annual returns of almost 11%.

If the recent market volatility is keeping you up at night, take a moment to reflect on whether your emotions are short-term reactions to the current conditions, or something you really need to act on. If you feel like you cannot stomach temporary losses, consider if your asset allocation is right for your overall investment goals and risk appetite.

A well-diversified core portfolio, aligned to your risk appetite will help spread your risk and afford you a margin of safety over the long term. Get this right and you will probably sleep better at night.

Contact us if you would like to discuss this further.

Source: Vanguard

1 https://corporate.vanguard.com/content/dam/corp/research/pdf/Cash-panickers-Coronavirus-market-volatility-US-CVMV_072020_online.pdf

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2022 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Turbocharge your super before 30 June

More than half of us set a new financial goal at the beginning of 2025, according to ASIC’s Moneysmart website. While most financial goals include saving money and paying down debts, the months leading up to 30 June provide an opportunity to review your super balance to look at ways to boost your retirement savings.

What you need to consider first

If you have more than one super account, consolidating them to one account may be an option for you. Consolidating your super could save you from paying multiple fees, however, if you have insurance inside your super, you may be at risk of losing it, so contact us before making any changes.ⁱ

How to boost your retirement savings

Making additional contributions on top of the super guarantee paid by your employer could make a big difference to your retirement balance thanks to the magic of compounding interest.

There are a few ways to boost your super before 30 June:

Concessional contributions (before tax)

These contributions can be made from either your pre-tax salary via a salary-sacrifice arrangement through your employer or using after-tax money and depositing funds directly into your super account.

Apart from the increase to your super balance, you may pay less tax (depending on your current marginal rate).ⁱⁱ

Check to see what your current year to date contributions are so any additional contributions you may make don’t exceed the concessional (before-tax) contributions cap, which is $30,000 from 1 July 2024.ⁱⁱⁱ

Non-concessional contributions (after tax)

This type of contribution is also known as a personal contribution. It is important not to exceed the cap on contributions, which is set at $120,000 from 1 July 2024.^iv

If you exceed the concessional contributions cap (before tax) of $30,000 per annum, any additional contributions made are taxed at your marginal tax rate less a 15 per cent tax offset to account for the contributions tax already paid by your super fund.

Exceeding the non-concessional contributions cap will see a tax of 47 per cent levied on the excess contributions.

Carry forward (catch-up) concessional contributions

If you’ve had a break from work or haven’t reached the maximum contributions cap for the past five years, this type of super contribution could help boost your balance – especially if you’ve received a lump sum of money like a work bonus.

These contributions are unused concessional contributions from the previous five financial years and only available to those whose super accounts are less than $500,000.

There are strict rules around this type of contribution, and they are complex so it’s important to get advice before making a catch-up contribution.

Downsizer contributions

If you are over 55 years, have owned your home for 10 years and are looking to sell, you may be able to make a non-concessional super contribution of as much as $300,000 per person – $600,000 if you are a couple. You must make the contribution to your super within 90 days of receiving the proceeds of the sale of your home.

Spouse contributions

There are two ways you can make spouse super contributions, you could:

• split contributions you have already made to your own super, by rolling them over to your spouse’s super – known as a contributions-splitting super benefit, or
• contribute directly to your spouse’s super, treated as their non-concessional contribution, which may entitle you to a tax offset of $540 per year if they earn less than $40,000 per annum

Again, there are a few restrictions and eligibility requirements for this type of contribution.

Get in touch for more information about your options and for help with a super strategy that could help you achieve a rewarding retirement.

i Transferring or consolidating your super | Australian Taxation Office

ii Salary sacrificing super | Australian Taxation Office

iii Concessional contributions cap | Australian Taxation Office

iv Non-concessional contributions cap | Australian Taxation Office