Taking control over your savings and being able to manage them as you wish is something that no other type of arrangement can give you, but the SMSF. However, there are certain rles that need to be followed. When it comes to investing into your future by setting up an SMSF, making personal super contributions is a great way to take everything up a notch, and that can be done for example, by making after-tax contributions from your own money. However, you should keep in mind that they do not include the super contributions which are made by the sacrificing of salaries.
Simply said, personal super contributions are after-tax (non-concessional) contributions that will take into account your non-concessional contributions cap in case you haven’t claimed a tax deduction for them. You are eligible to claim a tax deduction for the contributions you make to your super only if you are not employed or if you get only a small amount of money from work as an employee.
You can claim tax deduction if you get your income from:
- investments (rent and capital gains, dividends, interest)
- a personal business (self-employment for example)
- a foreign source
- government pensions or allowances
- partnership or trust distributions
If you are eligible to claim a tax deduction for personal contributions, you will need to complete and lodge a valid notice of intent to your super fund or RSA (retirement savings account) provider and have it acknowledged in writing by your fund.
A valid notice of intent can be given only if you:
- complete a notice of intent which can be downloaded from ATO
- use a form provided by your fund
- write to your fund and state that you want to claim a tax deduction for your personal super contributions
You can’t claim deductions for:
- a benefit which is transferred from a foreign super fund
- contributions which are paid by your employment from your before-tax income
- a rolled-over super benefit
- a termination payment that is paid by an employer into a super plan under testimonial arrangements applied until 30 June 2012
The great news about adding personal super contributions to your super is that you can make them even if you are unemployed and under 65. If you are 65 years of age or more, you can still make your personal after-tax contributions provided you are not 75 you have been gainfully employed for not less than 40 hours over 30 sequent days during the financial year.