The biggest changes to super in 10 years Insert Company logo here General advice The information provided in this presentation has been prepared as general advice only and has been issued by Centrepoint ID: 556475
Download Presentation The PPT/PDF document "April 2017" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
April 2017
The biggest changes to super in 10 years
Insert Company logo hereSlide2
General advice
The information provided in this presentation has been prepared as general advice only and has been issued by
Centrepoint
Alliance Limited and
<insert Licensee> (AFSL XXXXX).
It is based on our understanding of current regulatory requirements and laws as at the date of publication. As these laws are subject to change you should talk to a professional financial adviser for the most up to date information.
We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice and seek the assistance of a financial adviser before acting on any advice contained in this presentation. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither
Centrepoint
Alliance Ltd
nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.
Slide3
What’s out?
What are the key changes?
What should I be doing now?
2016 Budget reformsSlide4
Reforms not proceeding
Lifetime cap for non-concessional contributions
Removal of work test requirement for those aged 65 - 74
What’s out?Slide5
Transfer balance cap
Key elements:
$1.6m cap
Defined benefit pensions
Death benefit pensions
Capital gains tax relief.Slide6
Transfer balance cap
Applies to:
Amounts that may be transferred to a ‘retirement phase’ pension
Valuation of certain defined benefit and non-commutable pensions
Asset segregation for SMSFs and SAFs.Slide7
Transfer balance cap
When is an amount counted against the transfer balance cap?
Pension
type
When
Pre-existing pensions (ex. TTR)
1 July 2017
New pension
Commencement
TTR becoming URNP
Date of release
Non-reversionary
death benefit pensions
Commencement
Reversionary pensions
12 months after commencementSlide8
Transition to retirement
What should I be doing?Is a TRIS still worthwhile after 1 July 2017?
Age
Is TRIS income required?
If <60, how much benefit is tax-free component?
Is there a need to quarantine tax components?Slide9
Concessional contributions
Key elements:
Concessional contribution cap
Division 293 tax
Constitutionally protected funds
2016-17
From
1 July 2017
$30,000, or
$25,000 for all
$35,000 if 49 or older at 30/6/16
Indexed to AWOTE
in $5,000 increments
Indexed to AWOTE in $2,500 incrementsSlide10
Concessional contributions
What should I be doing?
Maximise concessional contributions before 30 June 2017
Review salary sacrifice arrangements post 30 June 2017
Review personal deductible contribution arrangements. Slide11
Non-concessional contributions
Key elements:
Annual non-concessional contribution cap
Eligibility – max. super balance
Bring forward cap
Eligibility for government co-contribution
2016-17
From
1 July 2017
$180,000
$100,000
Up to $540,000 - 3 year bring forward
$300,000 – 3 year bring forward
Basis =
6 X concessional cap
Basis = 4 X concessional
capSlide12
Non-concessional contributions
Eligibility
From 1 July 2017 NCCs may only be made by individuals with total super benefits that don’t exceed their transfer balance cap ($1.6m for 2017-18) as at the previous 30 June.Slide13
Non-concessional contributions
Bring forward cap
Existing arrangements apply for 2016-17 – i.e. up to $540,000
Transitional arrangements for unused portion of bring forward cap triggered in 2015-16 or 2016-17
From 1 July 2017:
Total super balance
Bring
forward
Less than $1.4m
3
years - $300,000
$1.4m
to $1.5m
2 years - $200,000
$1.5m
to $1.6m
No bring
forward - $100,000
$1.6m
or more
N/ASlide14
Non-concessional contributions
Bring forward cap – transitional arrangement
Only applies where the three year bring forward has been triggered in either 2015-16 or 2016-17
Three
year bring forward triggered
Transitional cap
2015-16
$460,000
2016-17
$380,000Slide15
Non-concessional contributions
What should I be doing?
Maximise concessional contributions before 30 June 2017:
Access higher NCC cap in 2016-17
Recontribute for spouse
Maximising NCCs where member balance exceeds $1.6m
Access any unused portion of the three year bring forward amount from previous years.Slide16
LISTO
Key features
Replaces the low income superannuation contribution from 1 July 2017
Returns the tax paid on concessional contributions for low income earners
Offset is 15% of eligible contributions to a maximum of $500
To qualify:
adjusted taxable income is <$37,000, and
At least 10% of ATI is from employment.Slide17
Deducting personal contributions
Pre
1 July 2017
From
1 July 2017
Personal
deduction is available where <10% income is derived employment related activities
10% test to be removed
ITAA97
imposes conditions of ability to claim a deduction
Expect s.290-170 requirements to remain, but may be simplified.
Income includes:
Assessable
income
Reportable fringe benefits
Reportable employer contributionsSlide18
Unused CC carry forward
Key features
The unused part of the concessional contribution cap that accrues from 1 July
2018
can be carried forward for up to 5 years.
Subject to an individual’s total superannuation balance being <$500,000 just before the start of the financial year.
2018-19
2019-20
2020-21
2021-22
2022-23
2023-24
Conc. Cont.
$10,000
$10,000
$10,000
$10,000
$10,000
$40,000
Unused cap*
$15,000
$15,000
$15,000
$15,000
$15,000
$0
Cum. unused
$15,000
$30,000
$45,000
$60,000
$75,000
$60,000
* Assuming the concessional contribution cap has not been indexedSlide19
Spouse contribution tax offset
Key features
Pre
1 July 2017
From
1 July 2017
Offset available 18%
of $3,000
Unaltered
Maximum offset $540
Unaltered
Spouse’s income* < $13,800
Spouse
income* <$40,000
* Income = assessable income + reportable fringe benefits + RESCSlide20
Anti-detriment payments
Current law
Allows for a lump sum death benefit to be increased, when paid to an eligible beneficiary, to compensate for contributions tax paid during the members life.
Funded by a (future) tax deduction
New law
Tax deduction for anti-detriment payments is removed where a member dies after 1 July 2017
Funds have two years to make a payment when death occurred pre 1 July 2017.Slide21
There are extensive changes
Some aspects are very complex
Opportunities exist pre 30 June 2017
Seek advice if:
Unsure about how the changes affect you
You currently have a TTR pension
You wish to make contributions before 30 June 2017
You have more than $1.6m in super
You have a SMSF.
Where to from here?Slide22
Questions?
Questions?