COVID-19 Super Withdrawal Scheme Concessional Recontribution

meowsers on 23/03/2020 - 07:49
Last edited 01/04/2020 - 21:48

Is there any reason that you couldn't withdraw $10k or $20k under the government's plan tax-free, and then immediately recontribute $10k or $20k concessionally (as long as you are under the concessional limit) taking that contribution as a tax deduction?

Therefore you wouldn't lock in your losses and you'd still get a nice tax cut at the end of it?

I've crunched the numbers and from a Sole Trader perspective (especially one in the service industry) there has not been a lot of word from the govt about tax relief. Mainly large companies etc.

If you contribute concessionally it's a 15% Tax. If you take out 20k tax free at a marginal rate of 37.5% you'd save around 22.5% tax. (37.5-15%)

So around $4500 dollars tax savings. And you'd reinvest in your super at the same time preserving growth opportunities.

Update:
Here is the official fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_she…

ATO Actually approves of this!!! From page 2 " He is also free to recontribute any unused amounts to his superannuation in the future (within
his contribution caps)."

AFR article about this: "TAX ACADEMICS" AKA ozbargain academics. Lol ANU ripped off my idea

https://www.afr.com/companies/financial-services/early-relea…

Financial COVID-19

Comments

- - - modsec802 on 23/04/2020 - 12:23
      
      https://files.ozbargain.com.au/upload/30514/78859/766d0eb6-6…
      - CyberMurning on 23/04/2020 - 12:27
        
        @modsec802: you literraly broke wiipantz and D A Y hearts
      - wiipantz on 23/04/2020 - 12:28
        
        @modsec802: I always take my research from social media…
        
        modsec802 on 23/04/2020 - 12:41
        
        @wiipantz: It’s from the ATO
        
        wiipantz on 23/04/2020 - 12:43
        
        @modsec802: Oh I'm aware…
        
        wiipantz on 23/04/2020 - 14:22
        
        @modsec802: https://treasury.gov.au/sites/default/files/2020-04/Fact_she…
- NotaSpender on 23/04/2020 - 11:25
  
  +2
  
  Just imagine getting caught, is it worth the extra tax you save?
- whooah1979 on 23/04/2020 - 11:58
  
  +1
  
  Is this practice unlawful?
- CyberMurning on 23/04/2020 - 12:19
  
  probably the most smartest people in australia works for ATO, and you want to get around them.
  yeah good luck. i rather go busking on the street if need $ than messing with them.
- modsec802 on 23/04/2020 - 12:20
  
  Tax commissioner published this on LinkedIn: https://files.ozbargain.com.au/upload/30514/78859/766d0eb6-6…
  - CyberMurning on 23/04/2020 - 12:23
    
    well now we know ATO staffs are monitoring ozb and saw this thread… and what if OP name is Matthew or Matt?
- Shadowsfury on 23/04/2020 - 12:30
  
  But if you ARE eligible and do this for the tax benefit?
  
  Matt is doing it whilst not eligible.
  - modsec802 on 23/04/2020 - 12:41
    
    No, the arrangement is artificial as it’s not being used for the genuine purpose - even though he is eligible
  - CyberMurning on 23/04/2020 - 12:54
    
    No, the picture clearly says recontribute not just withdrawing.
    - GoldenDragon888 on 23/04/2020 - 13:08
      
      +1
      
      Just make sure the contribution occurs before the withdrawal. /s

COVID-19 Super Withdrawal Scheme Concessional Recontribution

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