One of the major superannuation changes coming into effect from 1 July 2017, is the lowering of both the concessional (pre-tax) and non-concessional (after-tax) contribution limits. We’ve summarised the key areas your clients need to be aware of, and may require advice on.
- It is important to note that if your clients have a total balance of $1.6m or more in superannuation as at 30 June 2017, they will not be able to make further non-concessional contributions from 1 July 2017.
- For the 2016/17 financial year, it is still possible to make a contribution of up to $180,000 for one year, or to bring forward three years’ contributions. Eligible members will be able to make a contribution of up to $540,000 prior to 30 June 2017. If eligible clients do not use this full limit of $180,000 or $540,000 in the 2016/17 year, then they will be limited to the $100,000 annual and $300,000 bring forward caps for future years.
- Keep in mind where the bring forward of contributions has been triggered before 1 July 2017, transitional contribution caps may apply for the 2016/17 financial year.
- There are considerations for clients who contribute over $180,000 for the 2016/17 financial year, but not the full bring forward of $540,000. Depending on the amount contributed they may be restricted from making non-concessional contributions over the next two financial years.
- From 1 July 2017 the concessional contributions cap is lowered to $25,000 per year for all taxpayers.
- Taxpayers who were aged 49 or over on 30 June 2016 can make up to $35,000 in pre-tax contributions in 2016/17.
- Those aged under 49 on 30 June 2016 can make up to 30,000 in pre-tax contributions in 2016/17.
How can we help?
It is important that your clients are made aware of these changes and understand the potential impact, so they can review their contribution strategies going forward. Contact your Partners Wealth Group advisor now on 1800 333 143 to discuss how we can assist both your practice and your clients with the looming super reform changes.