Retirement and Superannuation - Assignment Example

SUPERANUATION XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Superannuation XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Name XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Course XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Course instructor XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Date submitted 1. The superannuation contributions are subject to taxation deductions according to the law. This is in 3 areas which include benefits, contribution and in the investment areas during the contribution time span. The taxation provisions are not included within the SIS ACT but are included within the taxation ACT of the year 2007. The Income Tax Assessment ACT 1997 is what contains most of the taxation regulations for the superannuation taxation regulations. This is mainly elaborated under section s295 of the Income Tax Assessment that’s constitutes an assemble contribution. 250 000X15%=37500 2. Incase the contributions are made by a different person on behalf of the contributor then the superannuation contributions are said to be assessable contributions. This is contained under section 295-160 of the Income Tax Assessable act as it is a ty0pe of contribution that is aimed at providing beneficial gains to another person. 20000X15%=3000 3. Under the general rule the two funds are taxed differently as the complying funds are normally taxed at 15% whereas the non complying taxes are normally taxed at an additional trivial rate which includes the additional medical levy which comprises of 46.5%. In cases where the employee has not attained the limit the contributions will be a 15% tax increment. There is normally a limit amount on the preservation of 0to 150,000 which is taxed at 15%. In the category of 150,000 to 1,100000 it accommodates a taxation of 30% and a tax of 45% in the categories values that exceed 1100000. 60000X15%=9000 4. The superannuation funds are not assessable funds if the employee does not make a claim to the deductions. It is the prerequisite of the employee to give prior notice under the superannuation act s290-170. 5. The superannuation contributions do not attract taxation if they are paid through the government. They only attract taxation if the contributor moves to a private company. In addition, not all the superannuation contributions are assessable to the fund. The assessable funds are only those contributions that have been received through sources that are untaxed like from the government sources. This is given in depth direction in the section 296-260 of the Income Taxation act 97. The exception rules are set out in the s296-160 all through to sub section 295-165 to 295-185 of the 97 taxation act. The amount is then rolled over to the superannuation 40000X15%=6000 6. The superannuation tax file number is vital in the specifying whether the contributions have been made by the contribution fund by the contributor or on behalf of the contributor. This implies that the TFN contributions income does not need to be specified. The no TFN contributions are those that do not had a specification TFN quote in relation to them. In accordance to this, the Income Taxation Act in section 295-10 provides guidelines based on the various kinds of income that are in compliance with the superannuation fund rules. The funds attract taxation marginally above the 46.5% rate mark if the contributions are received and quoted under the superannuation funds annually by the 30th of June. If the TFN is subsequently given within three years following the end of the no-TFN contributions year provision is made for an offset for the additional tax paid in relation to that amount. Contribution received in required of which a Tax File Number has not been quoted to superannuation fund by 30 June each year. No Tax File Number contributions income is effectively subject to tax at the top marginal rate of 46.5%. 400x46.5%=186 7. The superannuation funds attract considerable amendments to it. The funds have no pre-CGT assets as the superannuation assets that were acquired by 30th June were said to be superannuation funds. For the funds that were acquired between 30th and 21st September had to comply with the index cost base method and the CGT discount method. However, the capital gain tax discount allowed for the individual taxpayers of the superannuation funds is 30% and not 50%. The amendment also applies to the CGT provisions to the superannuation funds. These amendments have been spelt out in the section 295-85 of the Income Taxation Act 97. The asset must have been held for more than 12 months. Discount 1/3 are exempt income, 2/3 are included as are income. They require that the CGT will be the primary code in the verification of the profits and losses that will occur from a CGT event and are thematic to limited exceptions. 8. Dividends, shares, return from rentals and interest constitute an Investment earning. They are low tax components and attract a tax of 15% in accordance to the TR act 86 sub section 26 (1) a. This is in accordance to the act 295-500 ITAA97 tax at 45% s26 (1) (b). The fund paid out 1. Superannuation funds have the ability to reduce their taxable income through the deductions of the allowance where some expenses have to be sustained by the engagement in the superannuation business. The ITAA97 in the sub division 295-G tacitly explains the general expenses that have to be incurred which include the tacit, the insurance premium policies premiums paid through the superannuation deductions fees for the members. The deductions constitute and are specified under the section 8-1 ITAA97. It is further elaborated in the TR 93/97. 2. The amounts constitute the costs incurred in the running of a business. The amount in cooperates allowable deductions which are permitted under the TR 93/17 and contained under section 8-1 of the Income Taxation Act 97. 3. Under section 8-1 of the Income Taxation Act 97, the amounts will not attract deductions as it relates specifically to the exempt earning of current pension income that is to be exempted. Under this section, the expenses sustained during the earning of the exempt income are not to be deducted. 4. Under the section 8-1 of the Income Taxation Act, the amounts will attract a deduction which is in accordance to the TR 93/17 .This amount will constitute an allowable deduction under s8-1 ITAA97 as they constitute the costs incurred in the running of a business. 5. Under the section 8-1 of the Income Taxation Act, the amounts will attract a deduction which is in accordance to the TR 93/17 .This amount will constitute an allowable deduction under s8-1 ITAA97 as they constitute the costs incurred in the running of a business. 6. Under the section 8-1 sub section 2c of the Income Taxation Act, the amounts will not attract any deductions because thee amounts relate to the amounts that are to earn an exempt current pension. 7. Like the cases in questions 4 and 5, under the section 8-1 of the Income Taxation Act, the amounts will attract a deduction which is in accordance to the TR 93/17 .This amount will constitute an allowable deduction under s8-1 ITAA97 as they constitute the costs incurred in the running of a business. Part B Since Rob Winfrey is still in a working situation, he will have to find out the exact amount that is contained in this account. This is because the superannuation has a limit which attracts increased taxed if surpassed. The tax range as amounts between 0 and 150,000 attract a 15% tax, amounts fro 150,000 to 1,100,000 attract a tax of 305 whereas amounts that are more than 1,100,000 attract a tax of 45%. The government gives no limitation on the amount of contributions to be remitted by the contributor. However, the exc4ess superannuation funds are to attract more taxation in accordance to the Income Taxation Act 97. Where the defined contribution caps are exceeded, the contribution tax will be levied. The limit placed for the contributors under the age of 50 years is $254,000 $50,000 for the contributors who are above the age of 50. This was on and up to the 30th of June 2010. For non-concessional contributors, the contributions are 6 times more and stands at $150,000. Read More