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Making smart investment choices in your SMSF

One of the most exciting things about self-managing your superannuation is the ability to make your own investment choices. In SMSFs, there are also a lot more investment options available, and it can be tempting to get a little creative with your portfolio.

However, unless you are extremely confident and familiar with the investment, or have received trusted professional advice, it is advisable to be wary of unorthodox investment options. Especially if someone is making a hard sales pitch, because good investments sell themselves!

This week the ATO released a warning about telemarketers trying to convince SMSF trustees to invest in high-risk collectables, such as art. If you are considering investing in collectables, which can be a great addition to your portfolio, you should always have them independently valued.

If you are considering investing in unusual areas, you should also make sure that the investment meets the sole purpose test.

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  • Super co-contributions

    October 18, 2017

    Individuals may be eligible for a Government super co-contribution.

    A Government co-contribution means the Government adds to your super. You may be eligible for the super co-contribution, low-income super contribution (LISC) from the 2012-13 to 2016-17 financial years, or low-income super tax offset (LISTO) from 1 July 2017.

    Super co-contribution
    The Government will make a co-contribution of up to $500 if you are a low or middle-income earner and make personal (after-tax) contributions to your fund.

    The eligibility conditions for a co-contribution from the 2017-18 financial year include:
    a total superannuation balance less than the general transfer balance cap for that year
    the contribution you made to your super fund must not exceed your non-concessional contributions cap for that year.

    Low-income super contribution
    The low-income super contribution (LISC) is a Government super payment of up to $500 to help low-income earners save for retirement.

    If you earn $37,000 or less a year, you may be eligible to receive a LISC payment directly into your super fund.

    The LISC is 15 per cent of before-tax super contributions made you or your employer from the 2012-13 to 2016-17 financial years.

    If you have reached your ‘preservation age’ and are retired you can apply to have your LISC paid directly to you.

    Low-income super tax offset
    The low-income tax offset (LISTO) was introduced from 1 July 2017. If you earn income up to $37,000, you may be eligible to receive a refund into your super account. This is on the tax paid on your concessional super contributions up to a cap of $500.

    This means most low-income earners will pay no tax on their super contributions.