On 27 September 2016, the Government released another round of draft legislation to implement changes to superannuation it first announced in the 2016 Federal Budget.
With many of these changes due to take effect from 1 July 2017, now is a good time to think about:
- what impact these changes will have on your superannuation
- whether you need to change any of your SMSF arrangements.
Australia’s superannuation will change in 2017
Here’s how the latest superannuation legislation changes could affect you.
- It implements the Government’s $1.6 million transfer balance cap from 1 July 2017, which limits the amount an individual can hold in the tax-free retirement phase.
- The concessional contributions cap will be lowered to $25,000 per year for all taxpayers from 1 July 2017.
- The income threshold at which individuals need to pay an additional 15 per cent contributions tax will be reduced from $300,000 per year to $250,000.
- People with balances of less than $500,000 will be able to ‘carry forward’ unused concessional cap space for up to five years, giving those with broken work patterns greater flexibility.
- It removes the tax-free treatment of assets supporting a transition to retirement income stream.
How will you deal with these changes to superannuation?
To deal with these changes you may need to adjust your investment, contribution, pension and estate planning strategies, particularly if you:
- have a superannuation balance of close to (or more than) $1.6 million
- planned on making significant contributions to superannuation in the next few years
- are a high-income earner
- currently have a transition to retirement pension in place.
How can we help?
We understand that your superannuation is a key to your future financial security. So if you’re concerned about how these changes will affect you, don’t hesitate to get in touch with us. We’ll arrange a time to discuss your particular needs in more detail, and help minimise the effect these superannuation changes will have on your nest egg.