If you’re over 55 (but younger than 60) and still working, the chances are that any pension you’re receiving from super will be taxed in your hands. This is not ideal, especially if you’re paying more than 19% tax on your income. Fortunately, there may be a solution.
The tax office gave one lucky 58 year old (still working) taxpayer a great Christmas present last year. They’ve ruled that his pension was actually a lump sum payment and therefore tax free (up to a cap). This has resulted in the taxpayers superannuation fund enjoying a tax free status (ie not paying any tax on its earnings) and the taxpayer not paying any tax on the lump sum (initially a pension) that he received. So a win win for all concerned.
If you’d like to see if you qualify for this strategy we’d be more than happy to help. It may save you thousands in tax.
Kim Jay CA – Director