While some parents are able, and happy, to help adult children with a contribution for a great overseas holiday, most parents are looking at sensible options to gift for more long-term well-being and financial security such as helping with a home deposit. In this context, is it possible or permissible for parents to put money via a non-concessional contribution into the adult child’s super account directly, so there’s no travel through their bank account, where it could be waylaid and misspent? Anybody can make a non-concessional superannuation contribution into another person’s super account. The downside is that the money is inaccessible by anybody until the child reaches their preservation age, which could be many years in the future.If you’ve got doubts about their ability to handle the money, leave it to them in your will through a testamentary trust, which will be controlled by the trustee – and not the child
While some parents are able, and happy, to help adult children with a contribution for a great overseas holiday, most parents are looking at sensible options to gift for more long-term well-being and financial security such as helping with a home deposit.
Can I still make non-concessional contributions to my accumulation account in my industry fund? I’m told there are no limits on accumulation accounts. Would I still be better off after paying the 15 per cent tax in there than earnings from a bank term deposit? There is no reason why you should be keeping money in the accumulation phase, where your funds are paying tax at 15 per cent from the first dollar earned. Instead, you should move it to the tax-free pension mode.Once you are in pension mode, you will be required to make minimum drawdowns, which will be 7 per cent of the balance at 30 June last year. But this should not bother you, as you certainly could not survive on the small pension you would be getting with that level of assets.
Parents Adult Children Super Account Long-Term Financial Security Non-Concessional Contribution Bank Account Preservation Age Testamentary Trust
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