Superannuation contributions prior to retirement Paul is aged 59, has retired, has satisfied a condition of release and is looking to commence and account-based pension. Paul's superannuation account totals $600 000 including a tax-free component of $80 000. Paul's other investments consist of a $120 000 share portfolio (cost base of $60 000) and a term deposit of $100 000. Paul is looking to withdraw an income of $50 000 from his retirement income stream.

a. Calculate Paul’s net tax payable for the year if he acquired an account-based pension on the basis of the above information and withdraws an income of $50 000 for the year. Ignore income from the share portfolio and term deposit.

b. Assume that Paul sells his share portfolio, cashes in his term deposit and makes a non-concessional contribution into his superannuation account with a net amount of $200 000 prior to commencing an account-based pension. Calculate Paul's amended net tax payable for the year on the basis that Paul still withdraws an income of $50 000 for the year. Ignore income from any investments still held outside of his pension account and any CGT on sale of shares.

Tax rate 15%

Answer rating: 100% (QA)

a Gross income 50000 Tax on gross income 50000 x 15 7500 Less tax offs... View the full answer