New (tax) year, new opportunities – five changes worth considering

5 Tax Benefits You Should Consider This Year

It’s a new tax year – the arrival of the 2018/19 tax year brings with it many financial opportunities. Elston experts have focused on five of the best and explain how you can take advantage of them.

The arrival of the 2018/19 financial year has brought with it some potential new opportunities to consider:

1. Buying your first home?

From 1 July this year, eligible first home buyers can withdraw voluntary contributions made to their superannuation fund to purchase a first home under the First Home Super Saver Scheme (FHSSS). This applies to contributions made after 1 July 2017. The FHSSS allows eligible first home buyers to save their deposit in the concessionally taxed super environment.

2. Selling your home?

Eligible super members can make super contributions of up to $300,000 per person from the sale of their home after 1 July this year, if they are aged over 65. These contributions don’t count towards the contribution caps and can be made even if the member doesn’t meet the usual age, work and other contribution tests.

3. Eligible for a tax cut?

The tax cuts announced in this year’s Federal Budget have been legislated. The first tranche took effect on 1 July this year, providing savings of up to $530 (see table below). This extra cash could go towards paying off debt or making extra super contributions.

Taxable incomeTax paid in 2017/18Tax savings in 2018/19
$40,000$4,947$290
$80,000$19,147$530
$120,000$34,432$215
$160,000$50,032$135
$200,000$67,232$135

Source: Budget 2018-19 fact sheet, ‘Lower, fairer and simpler taxes’. The tax is calculated taking into account the low income tax offset, low and middle income tax offset and the Medicare levy (at 2 per cent).

4. Want a super deduction?

From 1 July 2017, most people (including employees for the first time) were eligible to claim personal super contributions as a tax deduction. This could reduce taxable income and give super savings a much needed boost.

5. Not likely to max out your super cap?

If super members make concessional (pre-tax) super contributions of less than the cap of $25,000 in 2018/19, they may be able to carry forward unused cap amounts, for use in a future financial year. This is worth keeping in mind, as it means members may be able to make ‘catch-up’ concessional contributions from 1 July 2019, if cashflow allows.

Need help?

At Elston, we can help assess whether any of these opportunities suit you and your circumstances, and adjust your financial plans accordingly.

If you would like more information please call 1300 ELSTON or email info@elston.com.au and an adviser will be in touch.

WARNINGS AND DISCLOSURES: This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.

Contact Us