ASK NOEL

My husband and I are trustees of my self-managed super fund. I'm 53 and will contribute my personal holding of shares into this fund as an "in specie transfer". Can I apportion $30,000 of it as a concessional contribution? In the 2011-12 financial year, I earned dividends of $70,000 and I could reduce my tax if I make a concessional contribution into the SMSF. I plan to contribute the balance of the "in specie' transfer", about $420,000, as a non-concessional contribution.

Noel Whittaker answers your questions

My husband and I are trustees of my self-managed super fund. I'm 53 and will contribute my personal holding of shares into this fund as an "in specie transfer". Can I apportion $30,000 of it as a concessional contribution? In the 2011-12 financial year, I earned dividends of $70,000 and I could reduce my tax if I make a concessional contribution into the SMSF. I plan to contribute the balance of the "in specie' transfer", about $420,000, as a non-concessional contribution.

You are free to allocate the contributions as you wish, as long as you don't exceed the caps. I suggest you involve your adviser or your accountant, because there are heavy penalties for getting it wrong. Make sure you nominate the respective proportions at the time the contribution is made.

In a recent article, you suggested to "salary sacrifice the maximum to super with the aim of creating a fund within super to pay off the investment debts when you reach retirement age". Neither I (nor my financial adviser) understand this comment about a separate fund within super. Could you elaborate?

The strategy is based on taking advantage of the difference between the 15 per cent entry tax on deductible contributions and your own marginal rate. There is no discrete fund inside super what we are trying to achieve is an increase in your super balance that can then be withdrawn tax-free after age 60 to pay off your loans.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature. Readers should seek their own professional advice before making decisions. Email: noelwhit@gmail.com.

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