The legislated superannuation reforms mean there is a closing window of opportunity to move funds into your Super before contribution caps (before-tax and after-tax) are reduced. It really is time to get Super organised.
Changes to Superannuation legislated in November 2016, could have significant implications for contributing funds (both pre and after-tax) into your super.
What you need to know:
The proposed $500,000 lifetime Non-concessional Contributions (NCC) Cap has been dropped. Instead a reduction in the current annual NCC cap from $180,000 to $100,000 will be introduced from 1 July 2017.
This means you can continue to contribute NCCs of up to $180,000 and use the bring forward rule to contribute up to $540,000 this financial year. After July 1, the 3-year bring forward provisions will remain, but only up to $300,000. No NCCs will be allowed once the proposed $1.6 million transfer cap has been reached. This change could potentially impact you if you have larger amounts of money, such as from the sale of an investment property or an inheritance that you wish to contribute to your Super fund.
Reductions of Concessional Contributions Caps to $25,000 from 1 July 2017.
The reduction to the Concessional Contributions Caps means you have until 30 June to contribute up to $30,000 in pre-tax super contributions ($35,000 if you are over 50). If you have salary sacrifice arrangements in place, you will need to address these to reflect the reduced Concessional Contributions Cap from 1 July 2017. The Concessional Contribution catch up provisions have been delayed and will now not commence until the 2019/20 financial year.
Please keep an eye out for our March update which will detail more of the superannuation changes from 1 July 2017 and how they may impact your financial plan.
If you would like advice on how the changes may affect your Superannuation and retirement planning, I encourage you to contact our office on 07 3720 1299 or email admin@wealthfundamentals.com.au so we can help you to make the most of your Super.
Read more about the legislated Superannuation reforms.
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The information (including taxation) contained within this document does not consider your personal circumstances and is of a general nature only - unless otherwise stated. Wealth Fundamentals strongly suggests that you should not act on it without first obtaining professional advice specific to your circumstances. This information is based upon our understanding of legislation at the time of writing. Such legislation may be subject to change.
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