A previous article referred to the loss of exempt current pension income status to those pension accounts that must now be commuted to accumulation. Apart from the obvious tax ramifications for members who must now convert their accounts from pension to accumulation there is also a death benefit consequence that must be considered. If a member...
This is a continuation of the previous article which considered ways of reducing a member’s balance to maximise their ability to make non-concessional contributions. Asset Allocation In this financial year assets may be allocated to different member accounts. These are segregated assets. If the high return assets are segregated to the member with the smallest balance a degree...
Previously we discussed the usefulness of planning a reduced 30 June balance for the purposes of maximising non-concessional contributions. We also noted that even a minor reduction could have a major effect. The following possible strategies should be considered prior to 30 June. These are important where a trigger point is imminent but may also be...
The ability of a member to withdraw from their taxable component and recontribute as a non-concessional contribution, thereby converting to tax exempt component, is still available now that the lifetime NCC limit proposal has been abandoned. The timing of the strategy, after this financial year has become more important. Appreciating that any member who could take advantage...
The small business CGT contributions are not affected by the super reforms. Neither is the ability for an unlimited structured settlement (compensation claim) contribution to be made. The issue is the timing. Either of the above have the realistic potential to take the member balance over $1.6m so, though they are not counted against the non-concessional cap,...
Death benefit pensions payable to children (to age 25) have special rules. A child’s transfer balance cap is generally determined by the value of the deceased’s retirement phase assets that they receive. It will depend on: whether the child started to receive the pension before 1 July 2017; if they started to receive them after that time, whether or...
John has a reversionary pension worth $1 million at the time of his death on 1 August 2017. The pension reverts to John’s wife, Heather. Heather already has her own pension and a transfer balance account balance of $800,000. Unless Heather acts within 1 year, the combined value of the two pensions will cause her to breach...
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...