The new financial year always brings change, and 2018/19 is no different. An array of rates and thresholds have moved, but this year the first week of July brings more than just incremental changes. A number of laws affecting the clients of financial planners are markedly different in the new financial year. July’s Industry Insights focusses on six of these changes planners need to know.
We will start off with the first of the six:
1. First Home Super Saver (FHSS) withdrawals commence
The FHSS provides a tax-effective way for first home buyers to save all or part of a deposit on their first home. wealthdigital provided a detailed analysis of the FHSS scheme for subscribers in February’s technical journal. If used to its full extent, the tax breaks in the FHSS scheme can help a high-income earning couples save almost $20,000 in pre-tax income. Even couples earning median incomes can still save over $14,000 in pre-tax income.
The ability to make withdrawals under the FHSS scheme commenced on July 1, 2018. The first step in making a withdrawal is to request a FHSS determination from the ATO. The determinations can now be requested using the client’s MyGov login.
Amounts available for withdrawal under the FHSS scheme include all voluntary contributions to super made by the client or their employer since July 1, 2017. It is important to keep in mind that the ability to claim deductions on personal contributions became widely available in 2017/18. Combining personal deductible contributions and the FHSS scheme should be a strategic consideration for all income-earning clients looking to buy their first home.
The information contained in this publication is based on the understanding KeyInvest (ABN 74 087 649 474 AFSL No. 240667) has of the relevant Australian legislation as at the date shown in this publication.
The information contained in this publication is of a general nature only and is intended for use by financial advisers and other licensed professionals only. It must not be handed to clients for their keeping nor can any copies of sections of this publication be given to clients. KeyInvest is not a registered tax agent under the Tax Agent Services Act 2009. We recommend that your client be referred to their registered tax agent or legal adviser prior to implementing any recommendations that you may make based on the information contained in this publication.