Moving to the new arrangements

There are a number of issues and opportunities you might need to consider during the transitional period between 10 May 2006 and 30 June 2007.

What is the $1 million transitional cap on non –concessional contributions?

There is a cap of $1 million on non-concessional contributions during the transitional period. This transitional cap includes all non-concessional contributions made between 10 May 2006 and 30 June 2007.

What if I exceed the $1 million cap during the transitional period?

The rules about excess transitional non-concessional contributions and what you need to do are explained in the fact sheet - Simpler super – transitional cap of $1 million on non-concessional contributions.

Do I have to pay capital gains tax (CGT) if I sell my investment property and put the money into super?

If the sale of your investment property returns a capital gain you will need to take into account the possibility of paying CGT.

Can I transfer my investment property into my self managed super fund?

No. You cannot transfer or sell your residential investment property to your self managed super fund.

In some circumstances you may be able to transfer real property used exclusively in a business to your self managed super fund. The property must be acquired by the self managed super fund at market value. You may have to pay CGT and the fund may have to pay stamp duty on the transfer of ownership.

Do I have to pay CGT if I sell my managed funds or shares and put the money into super?

If the sale of your managed funds or shares returns a capital gain you will need to take into account the possibility of paying CGT.

Can I transfer my managed funds or shares into my self managed super fund?

Yes, in some cases. For example, you can transfer listed shares and units in managed funds to your self managed super fund if they are listed on the Australian stock exchange (or the stock exchanges of some other countries), or if your investment is in a widely held unit trust. The units or shares must be acquired by the self managed super fund at market value. You may have to pay CGT and the fund may have to pay stamp duty on the transfer of ownership.

Can I claim a tax deduction for interest on a loan if I borrow money to contribute to superannuation?

No. Interest on money borrowed to make personal superannuation contributions is not tax deductible.

I am an employer. Can I claim a tax deduction for interest on a loan if I borrow money to make super contributions for my employees?

Yes. You can claim a deduction for interest on money you’ve borrowed to make superannuation contributions for your employees.

I own a small business. How much can I put into super now?

Under transitional arrangements you can contribute up to $1 million of non-concessional contributions to your super fund between 10 May 2006 and 30 June 2007.

Contributions of up to $1 million derived from the disposal of certain small business assets can be excluded from the $1 million transitional non-concessional contributions cap,so you may be able to contribute a further $1 million in the transitional period.