Changes to Superannuation loom large for many

Changes to Superannuation loom large for many

In May 2016, the Government announced a raft of proposed tax changes to the superannuation regime as part of the 2016-17 Federal Budget.

The legislation was finally passed by Parliament on 29 November 2016 however a number of regulations which effected parts of the legislation were not finalised until February/March 2017.

We’ve spent the past few months sifting through the legislation in order to gain an understanding of how these changes will impact your superannuation.

The key superannuation reform changes which take effect from 1 July 2017 and are likely to impact many clients’ superannuation strategies are as follows:

  • Non-concessional contribution cap reduction from $180,000 pa to $100,000 pa
  • Concessional cap reduction to $25,000 pa for all age groups
  • Earnings tax exemption removal on assets backing Transition to Retirement (TTR) pensions
  • Removal of “10% test” to claim a tax deduction for personal superannuation contributions
  • Introduction of $1.6 million Pension Transfer Balance cap
  • Introduction of a Defined benefit income stream income cap
  • Transitional capital gains tax relief
  • Segregation of assets for Self-Managed Superannuation Funds (SMSF)
  • Reduction to Division 293 threshold to $250,000
  • Additional 15% contributions tax on high income earners
  • Changes to superannuation death benefits
  • Ability to make “catch-up” concessional contributions

We recommend that you contact us to discuss these reforms and advise what impact they will have on your existing superannuation strategies. We will work with you to implement whatever changes are required on or before 1 July 2017.

Please contact us should you wish to discuss any of the issues raised above or to make an appointment to review your SMSF or superannuation strategies.