Cut to concessional contribution limits
As of 1 July 2017 the annual concessional contributions cap will be reduced to $25,000.
Currently the caps are $35,000 for people over 50 years of age and $30,000 for those aged under 30 years.
Also taxpayers who earn in excess of $250,000 will attract an additional 15% tax on their concessional contributions.
Lower annual non concessional (after-tax) contributions cap.
The non concessional cap has now been changed to $100,000 (down from $180,000). Taxpayers under the age of 65 will still be able to bring forward 3 years worth of non concessional contributions. Taxpayers aged between 65 and 74 will be able to make non concessional contributions provide they meet the work test.
Taxpayers with a superannuation balance of greater than $1.6 million will be ineligible to make non concessional contributions.
Tax Deductions for personal contributions
From 1 July 2017 taxpayers aged under 65 and those aged 65 to 74 who meet the work test will be able to claim a tax deduction for personal contributions.
This deduction is currently only available to taxpayers who earn less than 10% of their income from salary and wages, i.e. the self employed.
Transition to retirement pension wound back (TTR)
The tax free status of the accounts supporting these pensions will be removed. The income earned on these accounts will be taxed in the same way as regular accumulation accounts.
Axing of Anti Detriment payments
Currently when you pay out a death benefit to an eligible dependent the superannuation fund is able to claim a tax deduction. This will be removed.
New Benefits for low income earners
From 1 July 2017 up to a $500 refund will be available to taxpayers earning less than $37,000 who have paid concessional contribution tax. This will mean that they will not be paying a greater rate of tax on the superannuation contributions than their regular income.
Spouse tax offset expanded
The spouse limit will rise to $40,000 for people who use the $540 tax offset for spouse contributions.
If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com
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