DIY super re-contributions under scrutiny
The Australian Taxation Office will scrutinise the popular DIY super strategy of retirees making withdrawals only to recontribute them later on. The ATO indicated this week how it classes the strategy as unacceptable tax avoidance. It may be reasonable to re-contribute if a person has retired then rejoins the workforce quite a while later but if there's a short time between retirement and a contribution this may be interpreted as being made for a tax benefit. The ATO will also look at attempts to justify re-contributions through “contrived” returns to work, such as retirees being paid to look after grandchildren.