Superannuation Tax-Free Component

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4 Comments

  1. Christine

    how does the average person work out concessional contributions and non-concessional contributions into super over ones lifetime. How does one knows what went in over more than 25 years and in what proportions. one earned a salary and the employer put in the SGC. one knows the sgc% over time (4 to 9.5%) but who knows and can prove their salary over such a long period.
    Plus there were so many other things that went into super like bonuses, retrenchments, rolled over amounts from pre-1992 employer super funds, rolled over funds since 1992, exit fees from employer funds, etc etc.
    if this is so important in working out taxed and non-taxed super withdrawals upon retirement then why aren’t the CUMULATIVE concessional and non-concessional contributions recorded since 1992…..none of my super funds provided me with this information and only recently when i went over to a SMSF do i see the annual contributions but not the historical ones. now that i have a smsf i have been asked to provide the historical information which is near impossible and the ATO cannot help either….they agree that it is a minefield and with more baby boomers retiring it will be a major issue.

    Can you shine any further light on the matter.

    Reply
    • Chris Strano

      Hi Christine.
      It would have been the responsibility of your former superannuation fund/s to record this information.
      When you rollover your super, your former fund must provide a ‘rollover benefit statement‘.
      This rollover benefit statement has all the relevant tax components on it.
      You then provide this to the administrator of your SMSF.

      Reply
  2. Remzi

    Hi SuperGuy,

    Love you page.

    I have a question regarding a re-contribution strategy.
    Client holds $103K in AMP, age 60. I am trying to determine the taxable component after the re-contribution of $100k. How do you go about working that out?

    Details pre-withdrawal/contribution of $100k;
    Fund balance: $103k
    Taxable: $89k
    Tax Free: $14k

    Regards

    Reply
    • Chris Strano

      Hi Remzi, thank you for your comments and question.
      The $100k withdrawal would need to be proportionate and would therefore be 86.4% ($86,400) taxable component and 13.6% ($13,600) tax free component. The subsequent non-concessional contribution would be 100% tax-free component. Therefore, the super balance after the recontribution strategy would be:
      Taxable – $2,592
      Tax free – $100,408
      The taxable component post-recontribution strategy is 86.4% of the remaining $3,000 that was not withdrawn. The tax-free component will be 13.6% of the remaining $3,000 that was not withdrawn, plus the $100k NCC.
      If suitable, you could consider utilising the bring-forward rule and apply the recontribution strategy to the total balance, or waiting until after 1 July 2021 when the NCC cap increases.
      Obviously, to make any lump sum withdrawal from super, the client will have needed to have met a full superannuation condition of release.
      Regards,
      Chris
      Related Articles
      Retirement Condition of Release
      Bring-forward rule

      Reply

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