Superannuation splitting rules

What is superannuation contribution splitting? Can I split superannuation? How does superannuation work? What are the contributions splitting rules? Splitting your pension after you’ve retired.

It isn’t possible to take a lump sum from your ex-partner’s pension if they are already receiving an income from it.

This applies whether your ex-partner took a lump sum or not. Under the superannuation splitting laws a person is guilty of an offence if they make a statement in a declaration knowing that the statement is false or misleading and they then serve the declaration on the trustee of a superannuation fund. Super can’t be split as cash unless you have already met a condition of release. Contribution splitting involves making contributions to your partner’s super to bolster it.

Used strategically, superannuation contributions splitting can produce major financial gains for couples over the long term. The benefits of super splitting are most powerful around retirement, when couples are able to take advantage of tax-free lump sum withdrawals, and if one person is several years older than the other. When a marriage or de facto relationship breaks down the property each party owns can be divided between the parties.

Superannuation splitting is a common consequence of a relationship breakdown. You may enter into a formal written agreement to split superannuation.

To do so, both you and your partner must have your own lawyer. Methods for valuing specific. If you want to split your super contributions with your spouse , the receiving spouse must be either under their preservation age , or aged between their preservation age and , and not retired. When you split your contributions, you transfer or roll over a portion of the contributions you recently made to your super account, to your spouse’s super account. The new section sets out the rules for making superannuation splitting agreements and orders.

A person’s superannuation can be divided in any proportion between the husband and spouse in the event of separation. The pension rules are very complex, and outcomes depend on a range of factors, but assuming an older spouse meets all the rules there could be a substantial benefit in splitting their contributions to their younger spouse over time so the older partner can qualify for a government pension. When one of the party’s superannuation is split by agreement or court order, the splitting can occur in one of the following ways subject to the rules of the superannuation fund:- It may be possible for the party’s superannuation interest to be split immediately rather than waiting for that party’s benefit to become payable (e.g. upon retirement ). William is a lawyer at leading SMSF law firm DBA Lawyers where his work focuses on superannuation law compliance, succession planning and taxation in an SMSF context. Before joining DBA Lawyers, William worked in a variety of roles involving wills and estates law and philanthropy.

William holds a Bachelor of Laws and Bachelor of Arts from Monash University. Under the pension splitting rules , Joanne and Steve can give their spouse up to of their pension for tax purposes. It makes no sense for Joanne to move money from a lower tax rate to a higher tax rate.

It does, however, make sense for Steve to give some of his pension to Joanne. Confirm whether your super fund charges a fee for splitting a super contribution to recover the costs involved for the fund. Ensure you lodge the ATO’s Notice of intent to claim or vary a deduction for personal super contributions form before you apply to split your contribution if you intend to claim a tax deduction for a personal super contribution.

Pension payments from programs such as CPP (Canada Pension Plan) and OAS (Old Age Security) are not eligible for pension splitting regardless of age. If you are the recipient of the pension and are or older, you may split income from your RRSP, RRIF, life annuity, and other qualifying payments. If you are under 6 only certain life annuity payments and amounts received from the death of a.