How our client used their investment property sale to boost their super balances and minimise capital gains tax

Background:

Our clients are a married couple in their 60’s with household income of approx. $35K/annum (one partner is still working part time). They have recently sold an investment property where the capital gain was $160,000. Following the sale of their investment property, the clients would like to use sale proceeds to help build their super balances for retirement.

Goal:

  • Boost superannuation balances to help with retirement income goal.  
  • Reduce tax payable in current financial year (FY) following investment property sale.

Strategy:

  • Partner 1 – contribute $39,650 into superannuation account in current FY.
    • Maximising concessional contribution cap of $27,500 in current FY.
    • Using catch up contribution cap space of $17,650 to increase amount of super contribution we can claim as a tax deduction in current FY.
  • Partner 2 – contribute $20,000 into superannuation account in current FY to bring taxable income down to an amount where no income tax will need to be paid.

Advice Outcomes:

With super contribution strategy in place clients increased their superannuation balances by approx. $50,703.

With contribution strategy in place capital gains tax clients needed to pay following the sale of their investment property was reduced from $13,245 to $2,547 (a $10,698 reduction).

Ryan Porter is a Wealth Coach at Catalyst Wealth Group. His mission is to help his clients achieve financial success and live their ideal life.

Any advice or information in this publication is of a general nature only and has not taken into account your personal circumstances, needs or objectives. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your objectives, financial situation or needs.