If you weren’t already confused by the budget for superannuation, it just keeps getting better and better with more changes and alterations being proposed. Here’s to hoping that the Government finally make up their minds and we can get to the important task of tax planning.
Some of the proposals that have been announced:
1. The lifetime cap of $500,000 per person for after tax contributions will not go ahead. I’m sure the Australian Taxation Office enjoyed all the telephone calls checking member’s contribution balances. Although for us this is valuable information to have on hand.
2. Lowering the after-tax contribution cap to $100,000 from 1 July 2017. The current cap of $180,000 will still apply for the 2017 financial year. This means that the bring forward provision will be reduced from $540,000 to $300,000 from 1 July 2017. Special transitional arrangements will apply.
3. Restricted edibility for after tax contributions to individuals with super balances below $1.6 million. This will commence from 1st July 2017 and is based on the individuals previous 30th June Balance.
4. Lastly the work test is going to stay in play. This means that if your aged between 65 – 74 you will still need to be gainfully employed for at least 40 hours in 30 consecutive days before a contribution can be made.
Careful planning will be required for individuals with super balances close to the $1.6 million mark and those that have the ability to make after tax contributions. But hey, let’s not get ahead of ourselves just yet!