Splitting Superannuation contributions with your Spouse

Super contributions made from 1st January 2006 can be split with a member's spouse. Both married and de facto couples are able to participate.

Benefits

Super splitting, along with the recent transition to retirement changes makes super an even more attractive and flexible way to plan for your retirement.

Couples with significant super savings will find it easier to stay within their RBL and avoid paying excess benefit tax. This has been a big problem in the past where one partner has far more in super than the other.

Hence single income couples are able to:

• Take maximum advantage of two low tax thresholds ($135,590 for 2006/07 financial year) for lump sum benefits
• Income split any pension benefits.

Rules of the game

Splitting will only apply to the contributions made in the previous financial year. A person has only 12 months to request that their contribution be split.

You are able to split up to 100% of eligible contributions. The types of contributions that can be split include:

• superannuation guarantee contributions
• salary sacrifice
• after tax personal contributions (undeducted)
• deductible contributions

The following contributions cannot be split:

• rollovers and transfers from other funds
• employer Eligible Termination Payments
• small business CGT exempt rollover amounts

Furthermore, splitting only applies to an accumulation interest in a super fund and it will be the receiving spouse's service period that applies.

If you would like more information on splitting superannuation contributions with your spouse or would like to speak to a financial planner to learn just how you could benefit from super splitting simply follow this link: Enquiries Desk and mention "Splitting Super".

Source: Personal Wealth

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