Super Reforms - What you need to know
Are you making after-tax contributions to Super?
Your ability to make large after-tax contributions to super will be significantly reduced from $180,000 per annum to $100,000 per annum from 1 July, 2017. You have a few short months to take advantage of the bring-forward rule that allows you to contribute up to $540,000 this financial year.
- If you have large sums of money available (for example from an inheritance or sale of a property) that you wish to contribute to Super, you must act now before changes to the rules reduce your ability to transfer large amounts into Super. From 1 July, 2017 the bring-forward rule, which allows people under 65 years of age to bring forward 3 years of Non-Concessional Contributions, will reduce to $300,000 in one financial year.
- If you have more than $1.6 Million in Super, you will no longer be able to make Non-Concessional Contributions due to the introduction of the $1.6 Million General Balance Cap from 1 July, 2017.
Non-concessional Super contributions are preserved until you meet a condition of release, such as retirement. If you exceed the Non-Concessional Contributions cap, penalties will apply. Non-concessional Contributions are not subject to 15% contributions tax as you are contributing after-tax money.
We encourage you to seek professional financial advice to understand how the complexity of reforms may impact on your personal situation and to review appropriate options and strategies aligned to your financial goals.
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.
Lane Moses Pty Ltd ABN 56 092 186 117 trading as Wealth Fundamentals and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306 Australian Credit Licence No. 357306 trading as Fortnum Financial Advisers.
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.
This publication cannot be reproduced in any form without the express written consent of the author.