Spouse contributions: 18% tax offset (up to $540) – will be extended to spouses earning up to $40k (up from $10,800)

The Measure – Currently, a tax offset of up to $540 is available for individuals who make superannuation contributions to their spouses with incomes up to $10,800. The Government will allow more people to access the offset by extending eligibility to those whose recipient spouses earn up to $40,000. There are no changes to the current…

‘Catch‑up’ concessional contributions will be allowed – unused concessional contribution limits can be rolled forward for 5 years – for account balances of $500,000 or less

The measure – From 1 July 2018, the Government will help people ‘catch‑up’ their superannuation contributions by allowing individuals with account balances of $500,000 or less to rollover their unused concessional caps (for up to 5 years) to use if they have the capacity and choose to do so. [Note: this July 2018 commencement date…

Improving access to concessional contributions for individuals – the requirement to have less than 10% employment income will be abolished

The measure – From 1 July 2017, the Government will allow all individuals to claim a tax deduction for personal contributions to eligible superannuation funds (up to the concessional contributions cap) by abolishing the rule that they couldn’t have more than 10% of their income as employment income. This will apply to: individuals under the age of 65;…

Introducing the ‘Low Income Superannuation Tax Offset’ (LISTO) – refund of 15% contributions tax if more than marginal tax rate (adjusted income up to $37k and capped at $500)

What is it? From 1 July 2017, the Government will replace the Low Income Superannuation Contribution (LISC) with the Low Income Superannuation Tax Offset (LISTO). How does it work? The LISTO effectively refunds the tax paid on concessional contributions by individuals with a taxable income of up to $37,000 – up to a cap of $500. This…

Budget Super changes – concessional contributions cap down to $25k & 30% (Div 293) income threshold lowered to $250k (from $300k)

The measures From 1 July 2017, the threshold at which high income earners pay additional contributions tax (Division 293) will be lowered from $300,000 to $250,000. The Government will also reduce the annual cap on concessional (before‑tax) superannuation contributions to $25,000 (currently $30,000 under age 50; $35,000 for ages 50 and over). Details of the $25k concessional…

Superannuation changes announced in the Budget – Exposure draft of legislation and explanatory statements (for some measures) released for consultation

On 7 September 2016, Treasury released exposure draft legislation and explanatory material on the Government’s 2016-17 Federal Budget announcements to change the superannuation system (to make it more ‘sustainable’ – read, less of a drain on the Federal Budget). The draft legislation proposes to amend the ITAA 1997 and SIS Regs to implement the following…

Introducing the $1.6m cap on the amount that can be transferred to the tax-free portion of the fund

Summary of the $1.6m measure? From 1 July 2017, there will be a $1.6 million transfer balance cap on the total amount of accumulated superannuation an individual can transfer into the tax‑free retirement phase. Subsequent earnings on balances in the retirement phase will not be capped or restricted. Savings beyond this can remain in an accumulation account (where…

Legislating the objective of superannuation – exposure draft of Bill and EM for consultation

The objective that will be legislated is: “to provide income in retirement to substitute or supplement the Age Pension”. From 1 July 2017, a statement of compatibility must be prepared for any Bill or regulation relating to superannuation which sets out how the proposed legislation or regulation is consistent with the objective of superannuation. This will ensure…

Changes to 2016-17 Budget super changes – $500k lifetime limit ditched in favour of $100k pa non-concessional contributions – with 3 year carry forward (plus some cost saving measures)

On 15 September 2016, the Treasurer and Assistant Treasurer issued a joint media release about the Government’s (then) recent changes to the Superannuation Policies they announced in the last Federal Budget (2016/17) and took to the election (dropping the controversial lifetime cap of $500k on undeducted (non-concessional) contributions backdated to 2007). $500k lifetime limit on…

10% foreign CGT withholding provisions – exemption given for LPR’s and beneficiaries of deceased estates and for surviving joint proprietors – by ATO ‘legislative instrument’

On 6 September 2016, the Commissioner registered a ‘legislative instrument’ which will sound obscure and is, in fact, not all that momentous. But it is a good basis for re-visiting the non-resident CGT withholding provisions in Subdiv 14-D of the Taxation Administration Act 1953 – First Schedule (TAA1), and the weird and wonderful way in which they work. What…