Superannuation Changes happening 1 July 2017

21st Mar 2017

There are reforms to Superannuation that become effective from 1 July, 2017. This means you have until 30 June, 2017 to act using the existing superannuation rules. Here are the main items you need to consider:

  1. Tax deductible Superannuation Contributions
  • For 2017, you may contribute and claim either $35,000 (if you were 49 years or older on 30 June 2016) or $30,000 as a tax deduction.
  • From 1 July 2017, this amount is reduced to $25,000 per member.

ACTION: Maximise the higher tax deduction available in 2017 financial year.

 

  1. Non-concessional contributions
  • For 2017, you can contribute your own capital to superannuation up to a maximum amount of $540,000 using bring forward rules.
  • From 1 July 2017, this amount is reducing to a maximum of $300,000 per member. Should your balance exceed $1.6m, you will not be able to contribute any new capital after this date.

ACTION: If you have capital you want to contribute to your Super Fund, consider depositing before 30 June 2017.

 

  1. Member Balances of $1.6m and over
  • For 2017, if you are in pension mode in your Superannuation Fund, the entire Fund is tax free on its earnings regardless of your balance.
  • From 1 July 2017, the earnings on the portion over $1.6m will be taxed at 15%.

ACTION: Check your members balances before 30 June 2017 and the valuation of assets.

 

  1. Transition to Retirement Pensions
  • For 2017, these types of pension make your superannuation balance tax free on its earnings.
  • From 1 July 2017, the earnings on these balances will be subject to tax at 15%.

ACTION: Consider if you qualify for an Account Based Pension from 1 July 2017 as these are remaining tax free (up to $1.6m per member).

 

We are recommending all Superannuation Fund Trustees and Members check the impact of these changes well before 30 June 2017.

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Jason Birch is a Representative of Skybridge Portfolios Pty Ltd (ABN 47 149 093 069) trading as Skybridge Financial. Skybridge Portfolios Pty Ltd is a wholly owned company of Skybridge Financial Pty Ltd (A.C.N 124398385) and provides financial services through its Australian Financial Services License (AFSL No 407092). This information is of a general nature only and does not take into account your objectives, financial situation or needs. Before making any decisions you need to obtain personal advice from your advisor.