Boyce Chartered Accountants
The sweeping changes to Australia’s superannuation system come into effect on July 1. Do you know how these changes will impact you and your retirement plans?
For some there is a lot to consider.
Both the concessional (pre-tax) and non-concessional (after-tax) contribution limits will be reduced from July 1. Currently the concessional (pre-tax) contribution cap is $30,000 a year or $35,000 for those 50 or older, from July 1 the cap reduces to a flat rate of $25,000 a year for all taxpayers.
Non concessional contribution caps will also reduce from $180,000 a year to $100,000. If your total superannuation balance exceeds $1.6 million you will no longer be able to contribute from your after tax income.
There are a number of ways you may be able to take advantage of the current contribution limits before they change, we encourage you to speak to our superannuation specialists and work out a plan to suit your needs.
From July 1 the tax concessions currently enjoyed by funds paying transition to retirement income streams (TRIS) will be removed. Income from assets supporting TRIS will now be taxed at 15 per cent, including capital gains. There are still many reasons you may continue or commence a TRIS after June, but tax concessions are no longer available.
Another issue to be considered in relation to TRIS is whether it is desirable to elect to use the capital gains tax relief provisions. Like most of the changes coming into effect on July 1 the action you take will be highly dependent on your individual circumstances.
The upcoming introduction of a $1.6m balance transfer cap limits the amount that can be used to commence a pension. If your total superannuation balance in pension phase is greater than $1.6m on June 30 you are going to need to take action to comply with the new rules. A portion of your balance will need to be rolled back to accumulation phase.
Capital gains tax relief will be available to assist with the tax consequences resulting from actions to comply with the transfer balance cap.
If you think this cap may affect you, get in touch with a superannuation specialist to plan your needs and what the changes mean for you.
- Julie Schofield and Boyce Financial Services Pty Limited are Authorised Representatives of Lonsdale Financial Group Limited, ABN 76 006 637 225, AFS Licence No. 246934. This information is of general nature only and is not intended as a personal advice. It does not take into account your personal circumstances. We recommend you consult a financial adviser before making any financial decisions.