super rules are changing. find out what you need to do now

Super rules are changing.

Find out what you need to do now.

April 2017

Accountants AdvisorsAuditors

DisclaimerThis document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a Financial Adviser before making a financial decision. This document has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. ‘Count’ and Count Wealth Accountants® are trading names of Count. Count Financial Advisers are authorised representatives of Count. Information in this document is based on current regulatory requirements and laws, as at 1 March 2017, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.


The super changes at a glance

Lower caps on non-concessional

contributions

Lower caps on concessional contributions

Reduced threshold for higher contributions tax

New $1.6m transfer balance cap

Removal of tax-exempt status for TTR pensions

Tax offset for low income earners

Deduction for personal contributions extended

Key changes


Lower caps on non-concessional contributions

Remaining cap also reduced if have not fully utilised $540,000 by 1

July 2017

1 JULY 2017

Current Caps$180,000

Annual Cap$540,000

3-year ‘bring forward’ cap

New Caps$100,000 Annual Cap$300,000 3-year ‘bring forward’ cap



TOTAL SUPER

BALANCE

Non-concessional cap$100,000

Annual Cap

$300,000 3-year ‘bring forward’ cap

$1.6M+

NIL



Can’t make non-concessional once saved more than $1.6M

Current cap continues to apply to 30 June 2017

Maximum contributions reduced from 1 July 2017

Transitional rules for people still in ‘bring forward’ period


Lower caps on concessional contributions

1 JULY 2017

Current Caps$35,000

If 50+$30,000

Under 50

New Caps$25,000 Everyone


Reduced threshold for higher contributions tax$100 CONCESSIONAL CONTRIBUTION

CONTRIBUTIONS TAX $15

ATO

ADDITIONAL CONTRIBUTIONS TAX $15

THRESHOLD REDUCING TO $250,000Income$300,000+

Income $0 –

$300,000

Super fund


Concessional contributions – key points

Current concessional caps continue to 30 June 2017

Reduced concessional caps apply from 1 July 2017

Additional contribution tax threshold reduced to $250,000


Existing pensions must be reduced

Excess amounts can stay in super

New pensions must be within cap

$1.6M Transfer balance cap Combined Pension Value$1.6M


CGT relief for assets moved to accumulation phase

Gains accrued in pension phase

Transitional CGT relief

Reset cost base of certain assets moved back to

accumulation

Only funds impacted by transfer balance cap or TTR

reforms

SMSF and super wrap clients

Different eligibility requirements

Rules extremely complex


Income stream – key points

Cannot commence new pensions for more than $1.6M from 1 July 2017

Transitional CGT relief available for SMSFs and super wraps

Existing pensions must be reduced to $1.6M by 30 June

2017

Need to take action before 1 July 2017


Transition to retirement pension changes

Pension Account

Pension payments– tax free (over 60)

ATO15% tax

Investment earnings – tax free


No TTR$355,000

TTR current rules

$381,000

(extra $26,000)

TTR new rules$374,000

(extra $19,000)

Transition to retirement pension changes

Transition to retirement (TTR) Strategy example

Emily

Age 61 (retiring in 4 years)

Earns $60,000, has $250,000 in super

After four yearsLet’s compare TTR strategies


Income stream – key points

Earnings on TTR pensions

taxable from 1 July 2017

Transitional CGT relief available for impacted funds

Existing pensions must be reviewed

Potentially still very useful


Other changes

Spouse contribution tax offset ($540)

Not eligible once spouse income exceeds $13,800

Upper threshold to be increased to $40,000 from 1 July 2017

Low income super tax offset ($500)

Government contribution to refund impact of contributions tax where income less than $37,000 pa

Essentially a continuation

of current low income super contribution

Deduction for personal contributions extended

Deductions currently restricted to self employed and other ‘eligible’ taxpayers

Eligibility criteria removed from 1 July 2017

Allow people to claim tax deduction for contributions they make to super

End of year bonusProceeds from asset sale

Must submit deduction noticeStrict timeframes


Conclusion

Reforms represent largest change to superannuation in a decade

Potentially impact large range of people

Rules are complex


Special Offer: Trust Deed Update

Remember that even though the superannuation laws have changed, your trust deed does not. This means that

the trustee and members may be unable to make use of the changes because their trust deed does not empower them appropriately.

Future proof your SMSF and take full advantage of new opportunities.

A comprehensive & modernised trust deed update, incorporating all the amendments for July 2017 and onwards

$500 (plus GST)Contact Brad or Nick for more details on updating your trust deed.

[email protected]@perth.Bentleys.com.au

mailto:[email protected]

mailto:[email protected]


Thank you

Book an appointment to discuss your unique Super

change needs.

super rules are changing. find out what you need to do now

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