The following are a bullet list of superannuation changes coming into effect 1st July 2017.
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- There will be a $1.6 million transfer balance cap on the total amount of accumulated superannuation an individual can transfer into the tax-free retirement phase.
- The maximum concessional contribution will be reduced to $25,000.
- The threshold at which high income earners pay additional contributions tax (Division 293) will be lowered from $300,000 to $250,000.
- The annual non-concessional contribution will be lowered to $100,000 and once an individual balance reaches $1.6 million they will no longer be able to make any further non-concessional contribution.
- The government will replace the Low Income Superannuation Contribution (LISC) with the Low Income Superannuation Tax Offset (LISTO).
- Individuals under aged 65 and those aged 65 to 74 who meet the work test, are able to claim tax deduction for personal contributions to an eligible superannuation fund up to the concessional contribution cap even if they received a salary (previously the deduction was only available to those who earned less than 10% of their income from a salary or wage).
- Superannuation pension established under the transitional to retirement arrangement will be taxed up to 15% on earnings. There is no change on the tax treatment of their income.
- The anti-detriment provision which allows the superannuation fund to claim a tax deduction for a portion of the death benefits paid to eligible dependants will be removed.
- From 1st July 2018 individuals with a superannuation account balance of less than $500,000 will be able to carry forward unused concessional cap for up to 5 years.
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Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It's also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.