Claiming a tax deduction for personal super contributions was one of the top issues advisers helped clients with last month, according to AMP’s technical superannuation adviser support team.

Data from more than 2090 calls made by advisers in March, showed an increase in the number of clients looking for strategies to help manage their tax bills.

Other key issues being raised by financial advisers in March included:

• Understanding the conditions for accessing super early
• How to access your super at preservation age
• How transition to retirement pensions work
• Paying superannuation death benefits

AMP Technical Strategy Manager John Perri said the adviser support team has insight into the issues top of mind for advisers and their clients.

“This month we’ve seen an increased focus on clients looking for ways to reduce their tax bill, by taking advantage of a relatively recent change allowing employees to claim a tax deduction for voluntary personal super contributions,” he said.

Under the current rules, taxpayers can make extra super contributions, up to the concessional contributions cap of $25,000 each financial year, and claim the amount as a personal tax deduction in their tax return.

Until 1 July 2017, this rule was previously limited to the self-employed or those who earned less than 10 per cent of their overall income from employment sources.

“Personal deductible contributions can be made at any time during the financial year, giving people greater flexibility to save through super, which might be particularly beneficial leading up to tax time."

“By April people can start to better understand their tax liability for the year and how close they are to reaching their concessional contributions cap."

“Claiming a tax deduction for personal super contributions may be a useful way to maximise an individual’s concessional contribution cap or it could be a useful tool to manage a capital gains tax liability,” Mr Perri said.

If Labor were elected and wind back the Coalition’s personal super contributions, as they’ve previously indicated, it could result in the reinstatement of the 10 per cent test.

“There is still time to make use of this strategy before the end of financial year. As always, it’s worth consulting your financial adviser or accountant to assess whether this strategy is right for your personal circumstances,” said Mr Perri.

How to make a one-off concessional payment into super

• Make a personal super contribution into your super fund before 1 July. Check with your fund to find out what options are available to you.
• Ensure you lodge a ‘notice of intent’ form with your super fund before completing your tax return for the 2018-19 financial year
• Avoid making any withdrawals (including rollovers), or commencing a pension, from your super fund before your fund has acknowledged receiving your ‘notice of intent’ form
• Once the fund has acknowledged receiving your ‘notice of intent’ form, you can take this to your accountant and prepare your tax return – claiming a tax deduction for the amount of your personal contributions

About John Perri

John Perri is one of Australia’s foremost experts on superannuation, with over three decades experience navigating complex superannuation rules and regulations. As AMP’s leading technical super manager John helps break down complex super law into a language we can all understand. John’s aim is to educate Australians about the importance of engaging with their super to help build a better retirement.