The most extensive changes to Australia’s superannuation system in 10 years will come into effect from 1 July 2017.
As highlighted within our previous online articles, a majority of the superannuation reforms initially announced within the 2016/17 Federal Budget have now become law and will impact on most areas of superannuation including, but not limited to, contributions, pensions/income streams, taxation and estate planning.
Whilst these reforms will not apply until 1 July 2017, it is critical that all individuals review their personal superannuation position now and reassess their retirement plans, as the impact of the upcoming changes can be substantial (depending on each individual’s personal circumstances). For example, individuals with greater than $1.6 million within superannuation will be restricted from making further non-concessional superannuation contributions from 1 July 2017 (subject to limited exceptions).
Below are some key questions that should be carefully considered in advance of 30 June 2017 to ensure that there is sufficient time to address any necessary changes and / or implement any appropriate strategies in light of the reforms:
- Do you have in excess of $1.6 million within superannuation (including accumulation and pension accounts)?
- Are you planning to make large non-concessional (after-tax) superannuation contributions within the future?
- Do you have a defined benefit pension (i.e. lifetime, fixed term / life expectancy, market linked) with pension payments in excess of $100,000 per annum?
- Do you expect your personal adjusted taxable income to be in excess of $250,000 per annum in the future?
- Do you have a salary sacrifice arrangement in place with your employer for additional concessional (pre-tax) superannuation contributions?
- Do you have a Transition to Retirement pension?
- Will the transitional capital gains tax relief measures apply to your superannuation fund (CGT cost base reset rules)?
- Are you planning to utilise limited recourse borrowing arrangements within the future?
If you answered YES to any of the above questions, you are likely to be impacted by the upcoming changes to superannuation and it would be prudent to review your personal superannuation and retirement plans as soon as possible.
Further, if you are unable to answer any of the above questions, it is important that you source up-to-date information on your current superannuation position to assess the impact (if any) of the upcoming changes to superannuation.
You do not have to navigate the superannuation changes on your own.
If you are unsure of how the upcoming superannuation reforms will impact on your personal circumstances, please make sure you contact BLG Business Advisers on (02) 4229 2211 or online so one of our experienced advisers can assist yo