Super contribution limits changes could prove a challenge

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You may have heard that there are changes to superannuation taking effect on 1 July, including new contribution limits. That means you have only a couple of months left to consider if there is any action you should take to make the most of current super rules or to comply with the changes. Talk to your financial adviser and get ready for the changes now!

New super and tax thresholds from 1 July 2017

The ATO has released the superannuation and tax thresholds for the 2017/18 financial year. We compare the current and new thresholds in the table below.

Threshold 2016/17 2017/18
Transfer balance cap n/a $1.6m
Concessional cap $30,000 / $35,000* $25,000
Non-concessional cap $180,000 / $540,000 $100,000 / $300,000^
CGT cap $1.415m $1.445m
Low rate cap $195,000 $200,000
Untaxed plan cap $1.415m $1.445m
Co-contribution $36,021 / $51,021 $36,813 / $51,813
SG quarterly contribution base $51,620 $52,760
Employment termination payment (life/death) $195,000 $200,000
Tax free redundancy $9,936 / $4,969 $10,155 / $5,078
* $35,000 cap available in 2016/17 where you are aged 50+ as at 30 June 2017.
^ A transitional cap applies if the 3 year cap was triggered in 2015/16 or 2016/17. The ability to use these caps depends on total super balance as at 30 June 2017.

Take action now!

  • Talk to your financial adviser about whether your current financial plan is geared towards the upcoming changes, or if it needs reviewing.
  • Review your contribution strategy and consider if there is an opportunity for you to take advantage of the larger concessional and non-concessional caps for 2016/17.
  • Consider if you want to defer termination of employment (where possible) until after 1 July 2017 to potentially take advantage of:
    • Increased employment termination payment cap
    • Increased tax-free portion of redundancy
    • Abolition of 10% test to allow personal deductible contributions.

Want to know more?

It’s always a good idea to review your financial situation and savings plan before new legislation comes into place. Get in touch with your professional financial adviser to discuss if these changes will have an impact on your financial plan and what you can do now to reduce any negative impacts.

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