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Will my super contributions be taxed at 30% instead of 15%?

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Peter Switzer

I have a good business and pay myself a good wage but I do have a number of negatively geared properties which brings my after-tax income down quite a bit. Someone has told me that you have to add back these tax deductions for super and it could mean my super contributions will be taxed at 30% instead of 15%. Is this true?

The Government has deemed it fit to call anyone with $300,000 worth of income per year as wealthy and it means your super contributions over a certain level will be slugged at 30% instead of 15%. Let’s take a simple example to explain it all. If your taxable income is $280,000 and your employer makes $25,000 in concessional contributions, you will trigger the threshold – your “income” will be assessed as $305,000. The additional tax of 15% will apply to those concessional contributions that take your income over $300,000 – in this case an extra 15% on the extra $5,000. However, you also need to consider any investment losses, for example, from borrowing money to buy shares or from negatively geared property. Let’s take another example and assume your taxable income is $200,000, which has been calculated after deducting a net $90,000 loss on three investment properties. You also receive $10,000 in fringe benefits, and your employer makes super contributions of $18,000.
Under this measure, your “income” is:

Taxable income: $200,000
Concessional contributions: $18,000
Fringe benefits: $10,000
Net investment losses: $90,000
Total: $318,000

Published on: Friday, August 09, 2013

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