With the superannuation reforms coming into effect from 1 July 2017, a major change is the lowering of both the concessional (pre-tax) and non-concessional (after-tax) contribution limits.
Concessional contributions will be limited to $25,000 for all taxpayers from 1 July 2017.
Below is a summary of the changes for both concessional and non-concessional contributions.
Non concessional contributions
- If you have a total balance of $1.6m or more in superannuation as at 30 June 2017, you 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
- It is important to note that depending on the amount contributed to super for the 2016/17 financial year, you may be restricted from making non concessional contributions over the next two financial years.
- The concessional contributions cap is lowered to $25,000 per year for all taxpayers from 1 July 2017
- 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.
It is important that you are aware of these changes and how they may affect you, so that you can review your contribution strategies going forward. Please contact your Partners Wealth Group advisor now on 1800 333 143 to set up a review, to ensure you have the right strategies in place.