Christmas Present for Taxpayers over 55 and still in the Workforce

The Tax Office has issued a media release which clarifies a benefit for people who are over the age of 55 and still working.

The general anti-avoidance provisions will not apply where taxpayers are simply commencing a transition to retirement pension, and making salary sacrifice contributions to superannuation.

The Tax Commissioner accepts that taxpayers will be able to salary sacrifice their salary into their super fund and draw out a pension from the same fund – deferring tax and potentially delivering significant savings over a period of time

The Tax Office will only be concerned where accessing the pension or undertaking the salary sacrifice may be artificial or contrived.

This is a very important clarification for anyone who has reached retirement age or who is considering retirement.

WARNING: Before you go out & draw down a pension and salary sacrifice your salary, there are some important considerations that you need to consider including your current superannuation balance, your aged-based limits and cashflow requirements. What may be right for one person, may not necessarily be right for someone else.

Please call this office for more information.