Yes the superannuation laws are changing again! Is this a case of the more things change the more they stay the same?
Non-concessional contributions
While there are a number of different changes occurring the main one which will affect the most number of people in the short term are the changes around superannuation non-concessional contributions (NCCs).
This will be the last financial year in which people can:
- make a NCC of up to $180,000;
- trigger the “bring forward rule” and make a NCC of up to $540,000 in 1 financial year.
As of 1 July those caps are being significantly reduced:
- the cap of $180,000 per year will be reduced down to $100,000 per year
- if the “bring forward rule” is triggered next financial year then the overall amount is reduced from $540,000 down to $300,000.
For people who want to make a NCC of more than $180,000 this year and then make other big NCC’s over the next couple of years, they should get financial advice about the potential benefits of invoking the “bring forward rule” this financial year and getting the benefit of a $380,000 cap rather than being limited by the new $300,000 cap – $180k + $100k + $100k = $380k for FY 2017-19.
Capital gains tax
There are other changes which could benefit SMSF’s in pension phase by giving some or all of the assets within the Fund a higher cost base for capital gains tax purposes. If you have not already sought financial advice about those capital gains tax changes please do so quickly as things need to be done before the end of June in order to take advantage.
Estate planning
As for the other changes which will have an impact on some people’s estate planning, we are currently reviewing those and putting together a checklist to help people identify whether the changes require them to update their documents to ensure the most tax effective outcome after death. If you would like to receive the checklist when it is published, please click here.
This publication has been carefully prepared, but it has been written in general terms and should be viewed as broad guidance only. It does not purport to be comprehensive or to render advice. No one should rely on the information contained in this publication without first obtaining professional advice relevant to their own specific situation.
