The changes to superannuation announced in the 2016 Federal Budget have been passed by Parliament. Amongst the changes was a raft of legislation which may have been overlooked given a few of the substantial changes taking the headlines but these measures are just as important in your planning for 1 July 2017.
The main issues that you need to consider because of the changes include:
- Lower threshold for increased contributions tax
- Reviewing if your income will be more than $250,000 from 1 July 2017.
- If so, concessional contributions you make may be assessable for an additional 15%
- Personal contribution deductions – 10% rule repealed
- Reviewing if you have income available to contribute to your SMSF.
- Determining if and when you would be able to claim a personal deduction for these contributions up the annual cap of $25,000.
- Reviewing any current salary sacrifice arrangement you may have for its necessity and benefits.
- Spousal contribution threshold increased
- Reviewing if your spouse’s salary is below the new threshold of $37,000.
- Reviewing if your spouse’s and your own SMSF balance may need to be rebalanced.
- Determining if you have any available after tax income to contribute to your spouse’s superannuation and be eligible for an offset.
- Catch up concessional contributions (First available from 1 July 2019)
- Reviewing your work patterns to determine your future likely income streams
- Reviewing if your total superannuation balance is under $500,000 to determine your eligibility to make catch up contribution payments in the future.
- Anti-detriment reduction repealed from 1 July 2017
- Determining if your SMSF was intending to or currently funding a future anti-detriment payment.
- If an SMSF member dies before 1 July 2017, anti-detriment payments will still be possible up until 30 June 2019
The changes mentioned above are all diverse and need specific discussion and review of your circumstances to determine their impact so discussions with your specialist advisor are recommend.