Tax-Free Component
From 1 July 2007 the tax-free component is made up of:
1) The crystallised amounts of the following components held in a superannuation account as at 30 June 2007 being Pre-July 83 component; Concessional component; Undeducted contributions; The CGT exempt component and Post-June 94 invalidity component.
and
2) Government Co-contributions, Spouse Contributions and Non-concessional Contributions made from 1 July 2007.
Taxable Components
> Taxable Benefits paid as a lump sum (excluding terminal illness payments, death benefits and departing Australia superannuation payments), will be taxed as follows:
|
Age
|
Tax Rate
|
Tax Rate
|
|
Taxed Element
|
Untaxed Element
|
|
Age under 55*
|
|
- Up to Untaxed plan cap
|
20% (Max)
|
30% (Max)
|
|
- Excess over Untaxed plan cap
|
20% (Max)
|
Top marginal tax rate
|
|
Age 55 to age 59*
|
|
- Less than Low rate cap
|
Nil
|
15% (Max)
|
|
- Low rate cap to untaxed plan cap
|
15% (Max)
|
30% (Max)
|
|
- Excess over Untaxed plan cap
|
15% (Max)
|
Top marginal tax rate
|
|
Age 60 and over
|
|
- Up to Untaxed plan cap
|
0%
|
15% (Max)
|
|
- Excess over Untaxed plan cap
|
0%
|
Top marginal tax rate
|
*Included in Taxable Income for Medicare Levy purposes except for the taxed element of the ETP low rate threshold.
> The Lump Sum threshold (cap) above in relation to untaxed super benefits is known as ‘the untaxed plan cap’. Significantly, the untaxed plan cap applies to each superfund that you have (i.e. not the aggregate). However, if your current untaxed element in one superfund exceeds the untaxed plan cap, rolling over the excess to another fund does not increase your concession because a rollover is also counted towards the ‘untaxed plan cap’.
> Reasonable Benefit Limits (RBLs) for superannuation were abolished from 1 July 2007.
> The tax exemption for invalidity payments have been extended to the self-employed.
> Prior to 1 July 2007, a withdrawal from super can be made selectively from the above components without being compelled to withdraw any of the post 6/83 component. From 1 July 2007, withdrawals will be allocated proportionally to the taxable and tax-free components that make up the total amount of benefits in that particular superfund.