A word on the latest superannuation changes
By James Murchison - Principal at Murchisons
With the lead into the new superannuation rules we thought we’d share some advice on the taxation changes coming into effect on 1st July, 2017.
Firstly, let’s summarise the major taxation changes:
- The concessional contribution limit will reduce to $25,000 pa. This applies to employer contributions, salary sacrifice contributions and personal concessional contributions.
- Division 293 tax will cut in on adjusted income over $250,000 (previously $300,000). An additional 15% tax will be charged on superannuation contributions where the member’s adjusted income exceeds the $250,000.
- Non-concessional contributions will be limited to $100,000 subject to the member’s balance being less than $1.6m cap.
- A pension cap of $1.6m will be introduced. This balance will be indexed to CPI in future years in $100,000 increments.
- Where a member has a balance of less than $500,000 prior to the starting date of 1st July 2017, they may be able to contribute more than the cap where their previous concessional contribution in the last 5 years was less than they were entitled to make. This transitional rule applies from the 2018/19 year and is for the next 5 years.