Important Tax Update

Please note that if your income is more than $300,000 you may face a doubling of the superannuation contributions tax from 1 July 2012 or earlier subject to the Government announcement in the Budget as you may be subject post Budget. The definition of "income" for the new measure will include taxable income, concessional superannuation contributions, adjusted fringe benefits, total net investment loss, target foreign income, tax-free pensions and benefits.

Wayne Swan is expected to announce in the next budget on 8 May 2012 that the 15 per cent tax on concessional superannuation contributions will rise to 30 per cent for incomes of more than $300,000.

The higher tax rate will apply to all concessional contributions made by people earning more than $300,000. The exception will be if an individual would not exceed the threshold except for their concessional contributions superannuation. In that case, the higher rate will apply only to the part of the concessional superannuation contribution that is above the $300,000 threshold.

If your income is less than $300,000 you will continue to receive the normal 15% tax rate on your concessional contributions.

We strongly suggest that you make your concessional contributions before the 8 May 2012 budget as an extra precaution. Please note that this is the final year for the $50,000 concessional cap if you are over 50 and your super balance is above $500,000 based upon Government proposals.

Disclaimer – The material contained in this newsletter does not constitute advice. DPL & Co Pty Ltd is not responsible for any action taken in reliance on any information contained in this newsletter. Anyone reading the newsletter should not act upon material contained in this newsletter without appropriate consultation.