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Changes to Superannuation - Summary - Part 1 of 6

The biggest changes to superannuation in ten years have arrived.

 

In summary, these are:

 We have written a series of blog posts about these changes, each of which can be accessed by clicking the headings above.

 We are also running seminars covering the changes at 8am Thursday 6 April and 5.30pm Thursday 6 April. You can book into those sessions here.

 

An indication of persons most affected by the changes is included below, however we note this is not an exhaustive list, and anyone concerned should reach out to us to discuss their circumstances.

Who Why
Anyone with a TRIS
  • Your TRIS may actually no longer be a TRIS, if you have met a condition of release. You may inadvertently trigger your pension cap on 1 July 2017.
  • Your TRIS  may no longer be tax effective from 1 July 2017, and continuing the TRIS may not be in your best financial interests
  • You are likely to need advice as to whether your superannuation fund will qualify for the CGT relief.
Anyone approaching age 65
  • You may be approaching your last chance to contribute further amounts to superannuation.
  • If you are running a TRIS, it will immediately convert to an Account Based Pension on your 65th birthday – this may not be in your best interest.
Anyone with more than $1.6m in total superannuation balances
  • Your ability to make further non-concessional contributions is about to change dramatically, and this year may be your last chance to do so (eligibility requirements apply).
  • You may be able to access the CGT relief for your self managed superannuation fund if your SMSF is paying pensions.
  • You may be required to commute some of your pensions prior to 1 July 2017. Commuting the wrong one(s) and/or at the wrong time could cost you dearly.
Anyone with a defined benefit superannuation fund
  • The calculation of your superannuation balance will be worked out on a Special Value by formula. You may be assessed as having more than $1.6m in superannuation and not even know!
Any trustee of a superannuation fund who pays market linked or other defined benefit pensions
  • The rules around the valuation and taxation of these pensions are changing, and personalised advice will be required to comply.
Anyone who wants to contribute large lump sum non-concessional contributions to superannuation
  • This may be your last opportunity, depending on your accumulated superannuation balances. The annual limit is also decreasing from 1 July 2017 which may impact your plans.
Anyone currently salary sacrificing to superannuation
  • The limit for concessional superannuation contributions is reducing next year
Spouses who have uneven superannuation balances
  • Under the new rules, couples will be disadvantaged where one member has more than $1.6m super and the other has less than $1.6m, even if the combined total is less than $3.2m.The next few months leading up to 30 June 2017 may be your last chance to restructure your accounts to even up balances.
  •  Younger wealth accumulators should consider contribution splitting mechanisms to even up superannuation balances
Any fund member or trustee who currently runs segregated assets for pension accounts
  • Depending on your circumstances this may be prohibited from 1 July 2017 and you will need to attend to the relevant paperwork prior to this date. 
Any SMSF wanting to take advantage of the CGT relief
  • In most cases you will need to take action prior to 1 July 2017.

Disclaimers

This information is provided by A Squared Advisers Pty Ltd.

The information provided to you above is purely factual in nature and does not take account of your personal objectives, situation or needs. The information is objectively ascertainable and, therefore, does not constitute financial product advice. If you require personal advice you should consult an appropriately licenced or authorised financial adviser.