The Federal Government’s modified Superannuation reforms will apply from 1 July 2017. Here are five points you need to consider before month end.
1. Review Your Contributions
This is the last financial year that you will be the able to use the higher contributions limits before the change. So it is important to consider making or increasing your contributions to the following limits:
- concessional contribution limit of $30,000 (for under 50’s)/ $35,000 (if you’re over 50) – remember this includes your employers SG contributions. This reduces to $25,000 for everyone as of next year.
- non-concessional contribution limits of $180,000 (or $540,000 if you wish to bring forward the next 2 years). This reduces to $100,000 as of next year.
2. Undertake Tax and Estate Planning
Individuals with pension account balances above $1.6 million need to consider the actions to take, if any, prior to 30 June 2017. It is important to understand the impact the changes will have on your Superfund in conjunction with your personal circumstances
We recommend ensuring minimum pension payments are met for the current year (between 4 and 10% depending on your age). Consider additional lump sum payments if required.
3. Consider Resetting Cost Base(s) if you have more than $1.6million in your Super as a Pension account
We suggest reviewing transitional CGT relief rules in conjunction with the cost base of Fund assets as at 30 June 2017 (this is only applicable to balances over $1.6m and TRIS pensions). Note, election is not due until time of lodgement of the tax return.
4. Do You Have Transition to Retirement Income Stream (TRIS)?
TRIS’s may no longer be worthwhile for some individuals as the pension exemption on associated earnings is removed from 1 July 2017. It is therefore important to review whether to continue current TRIS arrangements or revert to accumulation mode.
5. Take Advantage of Small Business Concessions
The small business CGT cap and various concessions still continue to apply. They provide a significant opportunity for eligible individuals to contribute additional amounts into their super beyond the standard contribution caps.
Don’t Delay
We strongly encourage you to speak to a Centra advisor well before 30 June. We can ensure the right planning opportunities are available to you.
