Both houses have passed the key Bill which gives effect to the much discussed superannuation reforms originally announced in the 2016/17 Federal Budget.
This bill contains 10 broad measures to change the taxation and regulation of superannuation to make the system fairer and more sustainable. The majority of measures commence from 1 July 2017 and include:
Introducing a $1.6 million transfer balance cap which limits the amount that can be transferred to the retirement phase, where earnings are tax-free. This measure will also apply to death benefit income streams.
Reducing the concessional contributions cap to $25,000 for all taxpayers.
Introducing a concessional contributions catch-up regime for those with total super balances of less than $500,000 from 1 July 2018.
Allowing a deduction for personal contributions without testing the proportion of employment income received (the 10% test).
Reducing the non-concessional contribution cap to $100,000 pa (or $300,000 under the bring forward provisions), limiting the ability to make NCCs to people who have a total superannuation balance of less than $1.6 million and introducing transitional rules for those who triggered the bring forward rule prior to 1 July 2017.
Introducing a low income superannuation tax offset to replace the low income superannuation contribution (which will be abolished from 1 July 2017).
Increasing the annual income threshold from $10,800 to $37,000 for eligibility for the spouse contribution tax offset.
Abolishing the anti-detriment payment.
Removing tax exempt earnings for transition to retirement income streams.
With a lot of the changes, we have 5 months to put in place strategies, take opportunities and make sure our clients are compliant by 30 June 2017.
For further information, please contact Danny McAuley on 07 46130311.
By: Duane Granzien