News

Super Reforms – Pension Cap Effect

Previously we considered the new pension terminology. We will now consider the interaction between the terms. PLEASE NOTE THAT THE TABLES WILL NOT BE LEGIBLE ON A MOBILE DEVICE. Bill is 65 and has an account based pension balance of $800,000 on 30/6/2017. Detail PB TBA PTBC GTBC Pension Balance @ 1/7/2017 P$800,000 P$800,000 P$1,600,000 P$1,600,000 PNet Increase after Pension @ 30/6/2020 P$840,000 P$800,000 P$1,600,000 P$1,600,000 P$100,000 Cap Indexation 1/7/2020 P$840,000 P$800,000 P$1,650,000 P$1,700,000 PB = Pension balance...

Super Reforms – New Pension Definitions

The new legislation increases the number of new definitions to super. As the interplay can be confusing I have bolded some terms. Retirement Phase A member is in the retirement phase when they start a pension which entitles the pension account to exempt current pension income. Essentially this will include any pension except a transition to retirement pension. Account...

Super Reforms – Pension Changes

From 1 July 2017, 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. Subsequent earnings on balances in the retirement phase will not be capped or restricted. This means that a member may have a transfer balance cap of $1.6m...

Super Reforms – TRIS

Effective 1 July 2017 the tax-exempt status of the income from assets supporting a TRIS will cease. TRISs will be taxed as accumulation accounts. They will largely cease to represent a tax arbitrage opportunity and revert to their original intended use – a means of accessing preserved monies before retirement. Also, after this financial year, it...

Super Reforms – Division 293

From 1 July 2017, the threshold at which high income earners will pay additional contributions tax will be lowered from $300,000 to $250,000. This will lower the cutoff point before an extra 15% contributions tax is payable on deductible contributions. Due to the broad nature of the inclusions (taxable income plus reportable fringe benefits plus total net...

Super Reforms – Concessional Contributions

Concessional contributions will decrease but eligibility to contribute will be broadened. From 1 July 2017, the concessional contribution cap will be reduced to $25,000 from $30,000 (under 50s) or from $35,000 (50s plus). Currently, an income tax deduction for personal superannuation contributions is only available to people who earn less than 10 per cent of their income...

Super Reforms Series

We will be sending you a series of short articles on the impending super reforms over the coming days. We will be breaking down the changes into more digestible pieces whilst suggesting planning options. Our particular focus will be the period leading up to 30 June 2017 when a careful assessment of each client’s position will...