This had been a most unusual financial year and your income may be way down.

If that's the case, it may be valuable to postpone personal concessional deductible contributions to superannuation, or repairs and maintenance on investment properties, until a year when your earnings put you in a higher tax bracket, when the deduction would give you a higher refund.

If you have some shares with a capital gain and some with a capital loss, take advice about whether to sell both before June 30 to offset the gain against the loss.

Also, if there is likely to be some CGT payable, if you are in a lower tax bracket this year, the CGT may be charged at a lesser rate.

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Making superannuation contributions up to your maximum cap of $27,500 a year is a no-brainer. Once you have reached that cap, consider making a contribution for your spouse.

If they earn less than $37,000 this financial year you may even get a tax offset as a bonus.

Get advice on your particular circumstances, as this tax offset is unlikely to be a better option than making a deductible contribution for yourself.

To qualify for the spouse contribution tax offset of $540 all you need to do is make a $3000 non-concessional contribution, on their behalf. Your spouse may also like to consider making a non-deductible super contribution for themselves of $1,000, if they are eligible for a $500 government co-contribution.

A re-contribution strategy is worthwhile if you have access to superannuation and are still eligible to make contributions. You could withdraw up to $330,000 tax-free and re-contribute it as a non-concessional contribution, on which there would be no entry tax.

By doing this you would convert a large chunk of the taxable component of your fund to non-taxable and so alleviate substantial taxes for your inheritors if you died suddenly and your superannuation went to a non-dependent.

The cap for concessional superannuation contributions is $27,500 and for non-concessional is $110,000 for the 2022 financial year.

To make contributions to superannuation and to utilise these caps, your fund must receive your contributions by 30 June.

If you have more than one fund, all contributions made to all of your funds are added together and counted towards contribution caps. You may also be eligible to carry forward any unused contribution caps to a later financial year.

Don't forget the strategy of splitting your superannuation with your spouse. To be eligible, the receiving spouse must be under 65 and, if over preservation age, not retired. Where the receiving spouse turns 65 during the year of the split, you need to act before their birthday.

The transfer must be completed by June 30.

As long as the contributing member has a sufficient account balance, the amount that can be split is the lesser of 85 per cent of that year's concessional contribution or $27,500.

This means that, if the contributing spouse has made a $27,500 contribution, the maximum split would be 85 per cent or $23,375.

Keep the age limits in mind. Right now you cannot make any contributions past age 67 unless you pass the work test, but from July 1 you can make non-concessional contributions to super to age 75. To make concessional contributions past 67 you must pass the work test.

Take advice if you are nearing age 75 because apart from the downsizing contribution, it may be your last chance to boost your superannuation.

You could still use the bring-forward rule, which will allow you to contribute $330,000 as a non-concessional contribution and so move funds to an area where tax will be zero once you start to draw a pension from your fund.

Keep in mind that no non-concessional contributions can be made if your balance was $1.7 million or more at June 30 last year.

It seems a lot of people I know are pulling their money out of super and setting up self-managed funds to buy silver and gold. They seem to believe that a collapse is on the way and that holding precious metals will be safer than holding cash in super. I am not convinced and I wondered what you thought about this phenomenon?

Answer

I don't think I can ever recall a time when somebody wasn't forecasting a crash "just around the corner". It's a fact that nobody can consistently and accurately forecast the direction of markets, but what we do know is that good assets always bounce back after they fall.

If your money is with a good superannuation fund it will be spread among local and international shares, fixed interest, property and infrastructure assets.

This is a good mix that should perform well over the long haul. If you cash out of these assets and buy silver and gold you are simply taking a punt on commodities. I think that would be a most unwise decision.

Question

A few years ago I moved away from my home region to a smaller country town and now wish to move back but can't afford current housing prices there. However I have an old friend there who would also like to move into better housing.

I currently receive a part-pension and she does not. If we both sold and bought an apartment together and lived not as wife or de-facto, not sharing finances, bedroom etc but living just as friends, how would this affect my pension?

Answer

Two people are legally entitled to share accommodation and the effect on their Centrelink entitlements depends entirely on the facts of the case. You would need to keep your affairs strictly separate and make sure you are not seen to be a couple or act as a couple. If you do that, and continue to do it, there should be no problems.

Question

At the age of 57, I formally retired and converted my superannuation account from accumulation to pension mode. It is now worth $1.3 million.

I have been taking a monthly payment from this account ever since that point. Sometime after retiring I had an offer of further work in a consultant role, which I took and was therefore required to open a superannuation account for salary contributions. The balance of this account is $100,000.

I am now 65 will not undertake any further paid work and would like to close the accumulation account and consolidate funds into the pension account, where it will not attract tax on earnings. Is my preferred course of action possible? I don't require the $100,000 at this time.

Answer

It's certainly possible, but you will not be able to add that money to an existing pension account. You can either start a second pension account, or commute (stop) the existing pension, roll it back to accumulation, and rollover your other super account into this accumulation account, so that you can then start a new combined pension.

Your best strategy depends on your current position - the main aim of superannuation is to save tax so it might be worthwhile considering whether you would be no worse off just leaving the money in your bank account where it's available at call.

Question

Eight months ago my wife and I paid $800,000 for a block of land on which we intended to build our dream home. After spending considerable money on plans and approval, we now find that due to the huge escalation of building costs we are unable to go ahead. This leaves us with the sad decision to sell the land. It is now worth $1.2 million.

Would we be exempt from CGT because our intention was to build our own home? We have three young children.

Answer

Julia Hartman of Bantacs tells me that the circumstances such as you describe do not give rise to the CGT exemption. The only way to get an exemption would be to live on the property for at least three months. This could be done by putting a caravan on there, or building a liveable shed. If the property was then sold it would be exempt from CGT provided the caravan was included in the sale.

I don't think those options are viable given you have three young children. If do decide to build a home on the block you have four years from the date of purchase to build the house for the property to be exempt from CGT.

Just be aware that the 50 per cent discount on capital gains tax will not apply until you've owned the property for over a year from date of signing the purchase contract. The CGT may not be too harsh if you take into account the discount and the fact the land is in joint names.

Furthermore, all costs you have spent to date on the block can be added to the base cost. These include rates, purchase expenses, cost of plans and selling expenses.