On 1 July 2017, some rule changes will come into effect that may impact your retirement strategy and possibly the contributions you make into superannuation.

Before tax and after tax super contributions

  • The cap on concessional (pre-tax) super contributions will reduce from $30,000 pa or $35,000 pa (depending on age) to $25,000 pa.
  • An additional 15% tax on concessional contributions will be payable by people with incomes greater than $250,000 pa (currently $300,000 pa).
  • The cap on non-concessional (after-tax) super contributions will reduce to $100,000 pa (currently $180,000 pa) and $300,000 when using the ‘bring-forward’ rule (currently $540,000). Other conditions will apply.

Transition to retirement pensions

On 1 July 2017, some rule changes come into effect that may impact your ‘transition to retirement’ (TTR) strategy.

The tax rate payable on earnings from investments held in a TTR pension will increase from 0% to a maximum of 15%.

Also, as stated above the annual cap on concessionally taxed super contributions will reduce to $25,000.

It’s important to review your TTR strategy to see whether it’s still suitable and if not, assess some alternative savings strategies.

Acting before 30 June means you could potentially benefit from capital gains tax relief.

Over $1.6M in super

From 1 July 2017, a ‘transfer balance cap’ of $1.6 million will be introduced that limits the amount that can be held in the retirement (pension) phase of super.

If you currently exceed this limit it’s important that we meet to discuss your options which may include transferring some of your pension money back to the accumulation phase of super to ensure you don’t incur a penalty before
30 June.

Also, acting before 30 June means you could potentially benefit from capital gains tax relief.

Talk to us

It’s important to review your current strategy to assess the impact of these changes and any amendments that may be required. Care should be taken as breaches of the new rules can result in tax penalties.

To make an appointment, simply call us on 9725 9078. We’ll review your plans and look at what you may need to do to stay on track to achieving the retirement lifestyle you want.