Today I’m going to discuss an interesting contribution strategy that has been getting airplay recently. But first up, to put you in the picture more clearly, I need to discuss some background information.
Your super fund will be entitled to tax concessions if it’s a resident regulated superannuation fund and a complying super fund at all times throughout a financial year. These are both legislative terms.
If you set up your fund after June 1994, one step you completed would have been to elect that your fund was a regulated super fund. This election is prospective (not retrospective), irrevocable and, in effect, means you’ve elected to forever be regulated under the Superannuation Industry (Supervision) legislation, or whatever its legislation is in the future. Your fund can’t get the super fund tax concessions unless it makes this election. If you don’t make this election, your fund is taxed at 46.5% of the fund’s income, including realised capital gains.