Comment "RECONTRIBUTION" and I will send you our information pack

Comment "RECONTRIBUTION" and I will send you our information pack.

A recontribution strategy involves withdrawing money from your super and then contributing that same amount back into super as an after tax contribution.

To do this, you first need to have met a condition of release so you can access your super. The purpose is not necessarily to increase your super balance. It may help change the tax components within your super.

This can be particularly relevant if you intend to leave super to adult beneficiaries, including adult children who are not financially dependent on you or otherwise tax dependants.

For many people, a significant part of their super is the taxable component. This is commonly built from employer contributions, salary sacrifice and personal contributions where a tax deduction has been claimed.

When super is paid as a lump sum death benefit to an adult child who is not a tax dependant, tax may apply to the taxable component. This is generally up to 17%, including the Medicare levy.

A recontribution strategy may help increase the tax free component of super and potentially reduce the tax payable by adult beneficiaries in the future. However, eligibility to withdraw, contribution caps, timing and beneficiary circumstances all need to be considered carefully.

Comment RECONTRIBUTION and I will send you our information pack.

General advice only. This information does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for you and seek personal advice before acting.

Amy Lehmann is an Authorised Representative (No. 1292710) of Consortium Private Wealth Pty Ltd (AFS Licence 495401).