Take Advantage Of Current Super Rules Before July 1

Changes to superannuation contribution limits will take effect from July 1, 2017. Do you know about these changes? Will they affect you? Take a look at some of the key changes in the table below to see if they apply to you, if they do – you might want to use this time before July 1 to make the most of the current super rules!

 

Now

New*

No limit on funds moved into tax-free pension phase. $1.6 million transfer balance cap on super transferred to the tax-free retirement income phase.
You can contribute $180,000 of after-tax earnings to super each year (or $540,000 for those eligible to bring forward two years of contributions). Reduction in annual after-tax contributions cap to $100,000 (or $300,000 if bringing two years of contributions forward, if eligible). Clients with balances of $1.6 million or more, just before the start of the financial year, cannot make after-tax contributions.
Annual concessional (before-tax) contributions limit of $30,000 (or $35,000 if aged 50 or over by June 30, 2017). Reduction in the annual concessional (before–tax) contributions cap to $25,000. This applies regardless of age.
Unused concessional contributions caps are lost. Catch-up concessional contributions may be available for those with balances less than $500,000 just before the start of the financial year.
If income from employment is less than 10% of total income, you can claim a tax deduction for personal super contributions. Clients under age 65; or age 65-74 who satisfy the work test, can claim a tax deduction for personal super contributions.
Additional 15% tax on certain concessional contributions if your adjusted income exceeds $300,000. Additional 15% tax on certain concessional contributions, if your adjusted income exceeds $250,000.
Earnings on transition-to-retirement super pensions are tax free. No earnings tax exemption on transition-to-retirement super pensions. Earnings will be taxed at up to 15%.
Anti-detriment payments may apply on certain lump sum death benefits (generally a notional refund of contributions tax to be paid on death). No anti-detriment payments on lump sum super death benefits (no refund of contributions tax paid on death).
Offset for contributions to spouse’s super (if spouse earns under $13,800). Offset for contributions to spouse’s super (if spouse earns under $40,000).
The ‘low-income super contribution’ refunds tax (up to $500) on concessional contributions for those earning $37,000 or less. Introduction of the low-income super tax offset (effectively a continuation of the low income super contribution).

If you would like to discuss or clarify any of the above, give Leed Financial Services¹ a call and talk to our specialist to review your superannuation and retirement plan before the changes take effect.

 

*These measures start July 1, 2017, except for the catch-up concessional contribution measure which starts July 1, 2018.

¹ Centro Financial Services Pty Ltd T/A Leed Financial Services ABN 88 101 406 884 is a corporate authorised representative (ASIC No 278162) of Millenium3 Financial Services Pty Ltd 61 094 529 987 Asutralian Financial Services Licensee – Licence number 244252 Unit 7/50 Borthwick Ave Queensland 4172.