Tax Updates for the 2007-2008
The following are the changes to the tax code for the 2007-2008 tax year:
The ATO made several changes to superannuation benefits, including the following:
- Superannuation pensions and superannuation annuities are now referred to as superannuation income streams.
- Lump sum payments by superannuation funds are now known as Australian superannuation lump sum payments.
- Those 60 and over only have to include the untaxed element of their superannuation income streams or lump sum payments in their taxable income on their tax return.
- Those under 60 only need to include the taxed element and untaxed element of their superannuation income streams or lump sum payments on their tax returns. The tax-free component does not need to be included.
Employment Termination Payments
Eligible termination payments are henceforth known as employment termination payments (ETPs) if paid by an employer and superannuation lump sums if paid by a superannuation fund. Furthermore, ETPs will no longer be rolled over into superannuation unless they qualify as a transitional termination payment.
The age limit for claiming a deduction for personal superannuation contributions has been removed. Furthermore you can now claim a full deduction for all of your personal superannuation contributions, as opposed to the previous restriction to the first $5,000 plus 75% of the amount above that.
Starting this year you can also make personal superannuation contributions up to the age of 75, as opposed to the previous limit of 70, as long as you have satisfied the work test to make contributions.
Excess Contributions Tax Assessments
Tax concessions on superannuation contributions are henceforth limited by contribution caps. If your contributions exceed the contributions caps, your notice of assessment for excess contributions tax will itemise the tax on those excess contributions. If you end up owing tax, you may have to withdraw an amount equal to the tax liability from one or more your superannuation funds.