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Superannuation deduction is worth a look

THE superannuation contributions made on behalf of a spouse has been described as one of the best tax concessions that has been granted in years.

It is now, of course, also the time of year when we start to look at our tax position and try and eke out the maximum deduction we can possibly get.

Let’s look at the features of the spouse contribution.

The payment on behalf of a spouse is tax rebatable to the spouse making the payment.

The payment is still treated as a undeducted contribution into the fund.

The payment is not subjected to a 15 per cent contributions tax or the superannuation surcharge.

Future withdrawal benefits will be treated as undeducted contributions.

Earnings on the contributions will be treated as a post June 1983 taxable component.

It is possible to superannuate your spouse so that he/she may have a retirement nest egg separate from yours.

With all these features applying to spouse contributions there are some very compelling reasons to take advantage of the provisions herein. Obviously not everyone can do so.

There is a number of groups, however, that can.

For example, couples approaching retirement where one member has never had any superannuation savings should seriously consider this option.

Additionally, those couples where one spouse is not in the workforce can also benefit from these provisions.

The main thing we need to do is to talk to our financial planners to find out if it does apply to our particular circumstances and whether there is some benefit to be gained from doing so.

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