Does tax free income sound too good to be true, Sydney? Well, its not!
But there is a catch, you need to meet a few conditions:-
- – The money must be in the superannuation environment;
- – You need to be over the age of 60; and
- – You must have reached a condition of release to take money out of
- super.
How does it work?
For some time now, earnings generated within superannuation have been tax free once in ‘pension phase’. Just like a company or a family trust, pensions paid from a superannuation fund had to be reported through the pensioner’s tax return where the tax man would be able to get his share.
However, back in 2007, the Howard government introduced a radical change to the operation of superannuation. One of the more significant changes was the introduction of tax free income from a superannuation fund for self-funded retirees once they were 60 years of age and beyond.
This means that not only are earnings from super tax free, but also pension payments to a beneficiary are also tax free – meaning that it really is possible to obtain tax free income Sydney people.
How do I get tax free income, Sydney?
You will need to discuss this opportunity with an accountant or a financial planner as it is important to ensure all rules and regulations are met due to the highly regulated superannuation environment.
Some simple facts to keep in mind:-
For this opportunity to work, money will need to be within the superannuation environment. As a first step; work out how much you can actually contribute into super remembering that there are contributions limits one cannot exceed (without adverse tax consequences). So starting early is key.
Secondly; whatever you put into super, be prepared to leave it in there for the long haul. Super money is not like a normal bank account where money can be withdrawn at any time. In the super environment, unless a condition of release has been met, money cannot be withdrawn.
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