The superannuation landscape has been reshaped from 1 July 2017 with reforms representing some of the most dramatic changes in the last decade.
Thomson Reuters Australian Superannuation Handbook 2017-18 – current to 1 July 2017 – is now available for online subscribers via Checkpoint. The 2017 print edition will roll off the printing presses in early August (pre-order here). In the meantime, online subscribers can gain immediate access to this highly regarded and anticipated publication, now in its 10th edition.
While there are over a dozen separate reform measures, each with their own implications and complexities, the most dramatic change is the $1.6m pension transfer balance cap for amounts that can be transferred to the tax-free retirement phase. Any amounts above the pension cap must be rolled back to accumulation phase (where future earnings are taxed at 15%) or withdrawn from superannuation.
The other major reforms have reduced the annual contribution caps and introduced a $1.6m total superannuation balance limit for making non-concessional contributions. This is designed to restrict a person’s ability to build up excessive benefits that can enjoy the 15% tax rate in accumulation phase. Estate planning considerations have also been further complicated by the introduction of the pension cap.
These additional layers of complexity from 1 July 2017 mean that some clients may need to reposition their superannuation structures and strategies to avoid any nasty surprises, and continue to make the most of the concessions (albeit within the new limitations). To truly understand the implications of the reforms, it is necessary to appreciate the interconnected details of how the changes fit within the existing framework. It is here that the Superannuation Handbook, is an ideal companion for financial advisers, accountants, auditors, lawyers, superannuation trustees, fund administrators, students and other participants in the financial services industry.
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- Pension transfer balance cap of $1.6 million
- Transition to retirement pension changes
- CGT relief for pension reforms
- Reduced contribution caps
- Non-concessional contributions subject to $1.6 million balance limit
- Deductions for personal contributions
- Defined benefit pensions – special rules and additional income tax
- SMSF related-party borrowings – new integrity measures
- 2017-18 Budget measures – first home buyers and downsizing contributions