Advice about tax on Super roll over?

I have been reading about and considering starting a SMSF to buy more property. The bulk of my Super 100K is currently in Super SA which I can't access while a government employee. I have another Super Account with a small amount in from a stint in the private sector. I quit my govt job on 18th of June and restart in another govt job on the 19th July. Technically this window period of just over a month would allow me to roll my funds from SA super to the other fund from which I could then reaccess at a later date to set up my SMSF. What has stopped my plans in their tracks is that I have just discovered that I will pay 15% tax to move my super. I have 2 properties negatively geared at the moment that get me a decent tax return on my overall income from property and my gov job but don't think I would be able to claim enough to reabsorb the additional 15K Tax. Is this tax payable everytime you move super? I am in a quandry because if I don't decide now that money will probably be locked in Super SA for another 5-10 years. If I am not making sense please feel free to let me know. Any advice appreciated.
cheers
JASA
 
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What makes you think you will pay 15% tax when you move your super? I've moved my super a couple of times and never paid any additional tax.

Regards,

Jason
 
What makes you think you will pay 15% tax when you move your super? I've moved my super a couple of times and never paid any additional tax.

Regards,

Jason[/QUOTE

Thanks your question made me think. The application for payment form they sent me states:

" If your entitlement is being rolled over to a complying taxed super fund, the Taxable (untaxed) component of the entitlement will be taxed at 15%"

I rang them and asked what that meant and they told me that all of my super is untaxed. So I would be taxed at 15% of the total amount when I move it.

Does that mean that tax would be dependent on what sort of fund I choose to move it to? I really don't know what a complying taxed super fund means and what alternatives there are. Maybe it is just a scare tactic to put people off moving their money out? My other fund (the competition) is Hesta, I will ring them tomorrow and ask some questions at that end.

Cheers for your reply, I am glad someone did, have been waiting with baited breath for a reply to this question.

JASA
 
Don't know the exact answer to your question but when I make contributions to my smsf those contributions are tax at 15% within the smsf.

The contributions are 100% tax deductible to my company.

Maybe the public service has special dispensation which means no tax is paid on the contributions.

As per this document

http://www.supersa.sa.gov.au/xstd_files/PDS/Triple S/ts_pds.pdf

page 32

The Tax Office classifies Triple S as an
untaxed fund. This means that while your
entitlement is growing no tax is paid on
your:
– Employer contributions and
– Investment returns


No idea why but there it is.

Cheers
 
Your superannuation is taxed on rollover because it is currently in a defined benefit untaxed fund (government fund) these funds have special rules and aren't taxed like a 'regular' superannuation fund (by regular i mean an accumulation fund or SMSF, which is what most people have). Being in an untaxed fund means the majority of the contributions often aren't taxed when put into the fund, or on earnings, this is the reason your roll over will be taxed at 15%.

Options available are to preserve your money in the defined benefit fund until you reach your preservation age (retirement) then draw it as a pension / lump sum, or move it to a different fund now and pay the tax. Have you inquired to see whether your new government job will contribute to your super SA fund?

I have been reading about and considering starting a SMSF to buy more property. The bulk of my Super 100K is currently in Super SA which I can't access while a government employee. I have another Super Account with a small amount in from a stint in the private sector. I quit my govt job on 18th of June and restart in another govt job on the 19th July. Technically this window period of just over a month would allow me to roll my funds from SA super to the other fund from which I could then reaccess at a later date to set up my SMSF. What has stopped my plans in their tracks is that I have just discovered that I will pay 15% tax to move my super. I have 2 properties negatively geared at the moment that get me a decent tax return on my overall income from property and my gov job but don't think I would be able to claim enough to reabsorb the additional 15K Tax. Is this tax payable everytime you move super? I am in a quandry because if I don't decide now that money will probably be locked in Super SA for another 5-10 years. If I am not making sense please feel free to let me know. Any advice appreciated.
cheers
JASA
 
Your superannuation is taxed on rollover because it is currently in a defined benefit untaxed fund (government fund) these funds have special rules and aren't taxed like a 'regular' superannuation fund (by regular i mean an accumulation fund or SMSF, which is what most people have). Being in an untaxed fund means the majority of the contributions often aren't taxed when put into the fund, or on earnings, this is the reason your roll over will be taxed at 15%.

Options available are to preserve your money in the defined benefit fund until you reach your preservation age (retirement) then draw it as a pension / lump sum, or move it to a different fund now and pay the tax. Have you inquired to see whether your new government job will contribute to your super SA fund?

Thanks for your response, yes I can continue in SA Super in my next job but I would have preferred not to simply because they lock you in for the term of your employment so I won't be able to access the money to start a SMSF and buy more property that way. I guess I will just leave it there and ensure I elect my super goes into property shares before the next boom....which will be ? maybe 2017-2020 by my humble estimation.
 
Thanks this information helped

Don't know the exact answer to your question but when I make contributions to my smsf those contributions are tax at 15% within the smsf.

The contributions are 100% tax deductible to my company.

Maybe the public service has special dispensation which means no tax is paid on the contributions.

As per this document

http://www.supersa.sa.gov.au/xstd_files/PDS/Triple S/ts_pds.pdf

page 32

The Tax Office classifies Triple S as an
untaxed fund. This means that while your
entitlement is growing no tax is paid on
your:
– Employer contributions and
– Investment returns



No idea why but there it is.

Cheers

Thanks this is good information. I think I am beginning to understand.
 
There is tax on this rollover because no tax has been paid on the contributions. Govt super funds are taxed differently to 'normal' super funds.

Rolling it over from one 'normal' fund to another is not taxed.
 
yes it has been well explained.

one other thing, we have usually read that SMSF are not really worth having unless there is a min balance of about $200000?

it maybe another thing to consider?

probanly best to get some independent financial advice too.
 
I'm assuming you're on the Triple S scheme (don't even think about exiting the old Lump Sum scheme :eek:).

If so keep in mind that it pays both a temporary and permanent sickness and accident benefit that kicks in a month after you run out of sick leave.

This plan also allows you to salary sacrifice over and above what is normally allowed with SS.

Consider also paying a minimal contribution and diverting the rest to your own super.

Things to consider when doing your sums.

Super SA offer free financial advice regarding these issues.
 
G'day JASA,

It sounds like you're going great. Just check your gov super's policy and definitions about being an employee.

Qsuper in QLD gave me a definition over the phone and it seemed difficult to obtain my super during a "window of opportunity" between quitting and recommencing employment again. I didn't verify what they told me but they mentioned having to have all benefits paid out (long service etc.)

I tried to make it work by considering resigning and then rejoining, secondment to federal employers etc but none of it seemed to work.

I have now made an application to the superannuation complaints tribunal in an attempt to roll over my super. It will be unsuccessful as Qsuper is just following procedure.

Best of luck, but please know the ins and outs of their definitions and deed before you create a SMSF.
 
one other thing, we have usually read that SMSF are not really worth having unless there is a min balance of about $200000?

it maybe another thing to consider?

probanly best to get some independent financial advice too.

This is mainly due to the fees charged for preparing the acocunts and having the accounts audited. $200,000 sounds a little high, but at this level, the percentage of fees paid would be less than the fees charged by a professional fund.
 
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