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April 2017 - PowerPoint Presentation

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April 2017 - PPT Presentation

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

concessional 000 2017 cap 000 concessional cap 2017 contributions july income bring contribution tax balance 2016 key year years

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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?