Presented by Firstname Surname Jobtitle/Position A presentation to Client Name Date Smart EOFY Strategies For 30 June 2016

Important information This information is published by MLC Limited (ABN ), 105–153 Miller Street North Sydney, NSW, 2060, a member of the National Australia Group of companies. It is intended to provide general information only and does not take into account any particular person’s objectives, financial situation or needs. Because of this, you should, before acting on any information in this document, speak to a financial adviser and/or taxation professional so they can help you assess which year-end strategies suit you best. MLC is not a registered tax agent. If you wish to rely on this information to determine your personal tax obligations you should consult with a Registered Tax Agent. The tax estimates provided in this presentation are intended as a guide only and are based on our general understanding of taxation laws. They are not intended to be a substitute for specialised taxation advice or a complete assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent. Disclaimer SMART EOFY STRATEGIES FOR 30 JUNE

Agenda  Why invest via super?  Super strategies  Insurance  Other tax-effective year-end opportunities  How I can help? 3 SMART EOFY STRATEGIES FOR 30 JUNE 2016

Why invest via super? Tax concessions every step of the way 1. When you contribute to super, you could potentially  Make contributions from pre-tax salary  Claim contributions as a tax deduction  Get a Government co-contribution of up to $500  Get a tax offset of up to $540 RetirementNow SMART EOFY STRATEGIES FOR 30 JUNE

5 Why invest via super? Tax concessions every step of the way 2. While build up super  Earnings in fund taxed at maximum of 15%  Earnings from investments in own name taxed at up to 49 1 % 1 Includes a Medicare levy of 2% and the temporary Budget Repair levy of 2%. RetirementNow SMART EOFY STRATEGIES FOR 30 JUNE 2016

6 Why invest via super? Tax concessions every step of the way 3. When using super to pay pension  No tax on investment earnings  Tax offset between preservation age 1 and 59 2  Tax-free income at 60+ RetirementNow 1 Your preservation age ranges from age 55 to age 60 depending on your date of birth. 2 Assuming no untaxed element SMART EOFY STRATEGIES FOR 30 JUNE 2016

Super EOFY strategies For middle to higher income earners under preservation age Get more from your salary or bonus You can only sacrifice prospective salary or a bonus into super (i.e. income to which you are not already entitled) and need to make an effective salary sacrifice agreement with your employer. If you…  are an employee You may want to…  salary sacrifice  contribute pre-tax salary or bonus into super So you can potentially…  benefit from contribution taxed at max. 15%, (or 30% for people whose earnings and contributions are more than $300k+ p.a.) not marginal rate which is up to 49%  grow retirement savings  reduce tax payable on salary or bonus by up to 34% SMART EOFY STRATEGIES FOR 30 JUNE

Salary sacrifice case study William is aged 45  About to receive a $5,000 pa salary increase  Will bring his total salary to $100,000 pa  Considering salary sacrificing this additional $5,000 into super SMART EOFY STRATEGIES FOR 30 JUNE

Per annum Sacrifice pay rise into super Receive pay rise as after-tax salary Pre-tax pay rise$5,000 Less income tax at 39% 1 (N/A)($1,950) Less tax on super contribution ($750)(N/A) Net amount invested$4,250$3,050 Tax paid on earnings15%39% Salary sacrifice case study 1 Includes a Medicare levy of 2%. SMART EOFY STRATEGIES FOR 30 JUNE

10 Results (after 20 years) Assumptions:. A 20 year comparison based on $5,000 pa of pre-tax salary. Both the super and non-super investments earn a total pre-tax return of 7.74% pa (split 3.68% income and 4.06% growth). Investment income is franked at 28.55%. All values are after income tax (at 15% in super and 39% outside super including Medicare Levy) and CGT (including discounting). Note: No lump sum tax is payable on the super investment as William will be over 60 assuming no untaxed element Receive pay rise as after-tax salary and invest outside super Salary sacrifice pay rise into super $0 $179,544 $123,730 $80,000 $120,000 $160,000 $200,000 $40,000 + $55,814 SMART EOFY STRATEGIES FOR 30 JUNE 2016

Super EOFY strategies Make tax deductible super contributions To be able to claim a portion of your personal super contributions as a tax deduction, you need to be eligible and complete a valid ‘notice of intent’ form and give it to your super fund within specific timeframes. You also need to get an acknowledgement back from your super fund that the notice has been received and accepted by them. If you don’t you will not be able to claim a deduction. (You also need to be eligible to make a contribution). If you…  are self-employed or not employed You may want to…  make personal super contributions So you can potentially…  claim some (or all) of contribution as tax deduction  grow retirement savings  use deduction to reduce taxable income and income tax payable SMART EOFY STRATEGIES FOR 30 JUNE

Consider contribution caps  Salary sacrifice and personal deductible contributions count, along with other amounts, to ‘concessional’ contribution (CC) cap  The concessional cap is $30,000 in 2015/16*  The caps are annual amount and you can’t carry forward any unused amount to another financial year  It’s really important you make the most of the cap each year, particularly if you are approaching retirement  People who earn in excess of $300K pay an additional 15% tax on concessional contributions made over the $300K threshold and within the cap * For people aged 48 or under on 30/6/15 the cap is $30,000 and $35,000 for people aged 49 or over on 30/6/15. SMART EOFY STRATEGIES FOR 30 JUNE

Cap implications  Excess concessional contributions for the 2015/16 financial year are taxed at their marginal tax rate (MTR). An “Excess Concessional Contributions Charge” will also be applied by the ATO.  May elect to withdraw up to 85% of your excess concessional contributions from your superannuation fund to help pay your income tax assessment when you have excess concessional contributions.  Review this year’s contributions and remember that a range of other items count towards this cap, including: –super guarantee contributions, including those from more than one employer –concessional contributions made to fund insurance in super, and –contributions you claim as a tax deduction  Review your contributions in the months leading up to 30 June, particularly if you had or likely to receive a pay increase or bonus which requires additional superannuation contributions to be made. SMART EOFY STRATEGIES FOR 30 JUNE

Super EOFY strategies Get a super top up from the Government If you…  earn at least 10% of income from employment or self-employment;  earn a total income of less than $50,454; and  satisfy other eligibility criteria You may want to…  make personal after-tax contributions So you can potentially…  get up to $500 in free super from Government  spouse may qualify for co-contributions if you earn too much SMART EOFY STRATEGIES FOR 30 JUNE

Co-contribution case study Ryan is aged 40  Employed on salary of $37,000 pa  Wants to invest $1,000 in after tax salary each year until he retires at 60 SMART EOFY STRATEGIES FOR 30 JUNE

In 2015/16Invest outside super Make personal super contribution Amount invested$1,000 Co-contribution$0$449 Total investment$1,000$1,449 Tax paid on earnings34.5% 1 15% Co-contribution case study SMART EOFY STRATEGIES FOR 30 JUNE Includes a Medicare levy of 2%.

Results (after 20 years) Assumptions:. A 20 year comparison based on an after-tax investment of $1,000 pa. Both the super and non-super investments earn a total pre-tax return of 7.74% pa (split 3.68% income and 4.06% growth). Investment income is franked at 28.55%. All values are after income tax (at 15% in super and 34.5% outside super including Medicare Levy) and CGT (including discounting). Note: No lump sum tax is payable on the super investment as Ryan will be 60 at the end of the investment period assuming no untaxed element.. $1,000 pa invested outside super (no co-contribution) $1,000 pa invested inside super (includes co-contribution) $0 $78,438 $43,816 $40,000 $60,000 $80,000 $100,000 $20,000 + $34,622 SMART EOFY STRATEGIES FOR 30 JUNE

Super EOFY strategies Boost partner’s super and reduce your tax  For people who have a spouse who earns less than $13,800 pa  Make after-tax super contribution on their behalf  Potentially receive tax offset of up to $540  Grow spouse’s super and reduce your tax SMART EOFY STRATEGIES FOR 30 JUNE

Other super EOFY strategies Make insurance more affordable Concessions can:  Make it more affordable to insure through super, or  Enable you to purchase a higher level of cover Buy insurance in super with pre-tax dollars Employee Claim super contributions as tax deduction Self-employed Use co-contribution to help pay for future insurance Eligible for co-contribution Buy life and total and permanent disability insurance in super SMART EOFY STRATEGIES FOR 30 JUNE

Other smart EOFY opportunities Pre-pay expenses  Pre-pay annual premiums for an income protection policy held in your own name  Pre-pay up to 12 months interest on an investment loan (usually only available with fixed rate facilities) SMART EOFY STRATEGIES FOR 30 JUNE If you want to manage your cashflow more efficiently, you could:

Other super EOFY strategies 1 Includes a Medicare levy of 2% and the Temporary Budget Repair levy of 2% You may want to:  Cash out non-super investment  Make personal super contribution As a result, you could:  Have earnings in super fund taxed at max. rate of 15% (or 30% for people whose earnings and contributions are more than $300k+ p.a.)  Earnings from investment held in own name taxed at up to 49% 1  Reduce tax on investment earnings by up to 34% SMART EOFY STRATEGIES FOR 30 JUNE Make after tax contributions to super

Other smart EOFY strategies Manage CGT If you make a capital gain on asset sales this financial year, consider:  making a super contribution and claiming amount as tax deduction (if eligible) SMART EOFY STRATEGIES FOR 30 JUNE If you have received a capital loss from your investments, consider:  utilising the capital loss against any capital gains, so you can manage your tax on your investments more efficiently

Strategy wrap-up Before June 30 Super strategies  Salary sacrifice contributions  Personal deductible contributions  Co-contributions  Spouse contributions Insurance strategies  Buy insurance in super  Pre-pay deductible expenses Other smart opportunities  Make after-tax contributions  Manage CGT Start planning for EOFY 2015/16 now Key issues to consider  Review concessional contributions  Review TTR strategy  Make the most of your tax refund After June 30 SMART EOFY STRATEGIES FOR 30 JUNE

How I can help? Note to adviser: Optional slide(s)- e.g. relevant content regarding your advice services and how people can make an appointment. SMART EOFY STRATEGIES FOR 30 JUNE

Contact details line 1 Contact details line 2 Thank you MLC Limited ABN AFSL Part of the National Australia Bank Group of Companies.