The relevant date for the CGT is the date of formation of the contract – even if the performance of the contract is subject to conditions not yet fulfilled.
Sometimes arguments are made that the terms preclude the formation of a contract (as opposed to its performance). However, these types of conditions are rare.
Usually, conditions relating to building and pest inspection, financing, etc. do not prevent the formation of a contract. Therefore, if the conditions are met and the contract ends, the relevant date for CGT purposes is the date the contract was formed – not the date the sale became unconditional.
I read your recent article about withdrawing superannuation money and then putting it back via a re-contribution strategy. My big question is, what (if any) would be the downsides of taking money out and putting it back, and what should I consider before doing so? For example, if I hand over the money immediately, will it make a big difference to my accumulation and interest?
Once you reach preservation age, you can make unlimited tax-free withdrawals from your super and, provided your overall super balance is less than $1.7 million, you can make non-concessional contributions of $330,000 using the three-year rollover rule with no head tax.
There is no downside to doing this, except that you should be aware that you cannot choose which super components you can opt out of. Therefore, if you withdrew $330,000 and re-contributed it, the amount you withdrew may have a substantial non-taxable portion. The non-concessional contribution would be entirely non-taxable.
There has been a lot of information regarding the great changes coming on July 1st. You recently wrote that anyone can contribute to the super until age 67 now but, from July 1, anyone can contribute until age 75 without taking the work test. My financial adviser confirmed to me that the work test is abolished from July 1st. Can you explain to me ?
From the emails I receive, it seems that a lot of misinformation is circulating.
However, the new federal legislation is clear: Starting July 1, anyone can make nonconcessional super contributions up to age 75, as long as their super balance does not exceed $1.7 million.
To make preferential (tax-deductible) contributions, you will need to pass the work test, which involves working 40 hours over 30 consecutive days.
- The advice given in this article is of a general nature and is not intended to influence readers’ decisions regarding investments or financial products. Before making financial decisions, they should always seek their own professional advice that takes into account their personal circumstances.
Noel Whittaker is the author of Retirement Made Simple and many other personal finance books. Email: [email protected]