William Jones is aged 56 and is self-employed. He is in good health and he has asked
Question:
William Jones is aged 56 and is self-employed. He is in good health and he has asked you for advice on whether he should take his superannuation as a lump sum at the end of the current tax year or whether he should wait unit he is 60. Assume that the fund is a taxed fund.
Over the years William has contributed to a superannuation fund for self-employed business people, and the most recent statement from his taxed superannuation fund states the following entitlements:
- Concessional contributions $420,000
- Non-concessional contributions $250,000
- Previous growth (interest and capital gain) $180,000
Before the end of the current year William plans to contribute another $10,000 and the superannuation fund has reported an income of $20,000 before tax.
Required:
Advise William on the below i) to iv). Show all calculations and cite relevant legislation where appropriate to support your answer.
- The effect of his contribution on his personal tax.
- The tax if any to be paid by the superannuation fund on the income on William's investments.
- The tax impact of taking the total value of the superannuation benefits at the end of the current tax year.
- The tax impact of taking the total value of the superannuation benefits after he turns 60.
Financial and Managerial Accounting
ISBN: 978-0538480895
11th Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren