a. Changes effectively re-introduce a ‘RBL’ for super – $1.6M per person. Lowering the annual caps means take longer to get there so need to plan early to fully utilise.
b. Opportunity for those to maximise current contribution limits this financial year – both concessional and non-concessional contributions. Any unused ‘bring forward’ of the current non-concessional cap will be reassessed on 1 July 2017 to reflect remaining lower amounts. This could affect amount to be contributed if not all done before 30 June 2017. Further won’t be able to contribute NCC anyway if balance over $1.6M at 30 June 2017 – presumably unless account drops in later years.
c. New approach provides protection for those who suffer investment losses – they can ‘top-up’ again within the limit if you can contribute still to super, as balance checked each 30 June. Provides much needed flexibility for small business operators to manage irregular super savings and future small business sales.
d. Interaction with pension limit of $1.6M will also be a key to the changes and how it is legislated. Expect once you have commenced pensions up to your $1.6M pension limit then any further NCC contributions would also be ruled out – as your ‘balance’ would have reached the ‘RBL’.
e. No further changes announced to previous proposed pension changes for amounts above $1.6M or TRIS accounts from 1 July 2017. This is where complexity lies.
Tim Wedd
Executive Director
Crystal Wealth Partners
t: (02) 8667-3046
m: 0408 608 349
tim@crystalwealth.com.au
www.crystalwealth.com.au