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 will no longer be possible to nominate a pension payment to be taxed as a lump sum. A TRIS will not count towards the member’s transfer balance cap.

This is the last year that a TRIS may be used to enhance salary packaging to a significant degree so you may wish to ensure your clients take advantage of the situation for the last time. Remember that, if you are commencing a TRIS this year and intend to cease it at year’s end, you will need to draw a series of payments to avoid the risk of having the pension disallowed.

In a future article, we will discuss how a TRIS, operated until the end of this year, may be used to minimise the CGT effect for members who will utilise their maximum pension transfer balance cap.