SUPERANNUATION and Account Based Pensions provide a source of tax effective regular income for many Australians.
From July 1, changes to superannuation rules may impact your ability to make non-concessional contributions to your superannuation.
What's changing from 1 July 2017?
The annual non-concessional contributions cap (the amount of money you can place into super as a lump sum) reduces to $100,000 (from $180,000) and the maximum bring forward cap (essentially being able to make use of 3 years contributions in one year) is lowered to $300,000 (from $540,000). So this financial year is the last chance for some to contribute up to $540,000 to their super as NCC.
Individuals under 65 are eligible to make NCCs at any time. Those who are 65 years of age or over at the time of contribution are eligible to make NCCs if they are not yet 75 and have met the 'work test'. (Work test - you are gainfully employed for at least 40 hours over 30 consecutive days during the financial year.)
From July 1 2017 there is a new cap of $1.6 million for individuals, which if exceeded by your superannuation balance, will prevent any further NCC's being made. This criterion is to be met in addition to the existing age and work test requirements.
Financial Advisers with a knowledge of the 'bring forward' arrangements, including any transitional arrangements and the importance of a client's total superannuation balance and the general transfer balance cap can help maximise contributions and ensure you remain under the relevant caps.
- For more Information contact Tim Maher at Maher Digby Securities Pty Ltd - Financial Advisers - AFSL No. 230559 Ph: 0754411266 or visit our website www.maherdigby.com.au
(This document was prepared without taking into account any person's particular objectives, financial situation or needs. It is not guaranteed as accurate or complete and should not be relied upon as such. Maher Digby Securities does not accept any responsibility for the opinions, comments, forward looking statements, and analysis contained in this document, all of which are intended to be of a general nature. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend consulting a financial advisor.)