Super Reforms - What you need to know

Are you holding more than $1.6 Million in Super?

A new $1.6 Million Balance Transfer Cap will be introduced on 1 July, 2017. If your Super balance has reached this amount, you will no longer be able to make non-concessional contributions. Further, if you are retired and have more than $1.6 Million in retirement phase income streams, you will need to reduce the total value of your retirement phase income stream to below $1.6 Million. 

  1. The maximum amount you will be able to have in a pension phase is $1.6 Million from 1 July, 2017. If you have excess funds in pension phase you may reduce the amount through a number of options:
    • opt for a lump sum benefit and remove excess funds from Super,
    • use a lump sum benefit and use the funds to make Non-concessional spouse Super contributions, or
    • transfer excess funds back to the accumulation phase.
  2. You may be eligible for Capital Gains Tax relief. Provisions for Capital Gains Tax relief have been introduced for trustees of Super funds who are required to move assets from the pension phase back to accumulation phase due to the introduction of the $1.6 Million Balance Transfer Cap. There are tax complexities and implications which need to be considered when transferring assets from a pension phase (tax-free) back into the accumulation phase (taxable environment), so it’s important to seek advice.

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.
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