We are nearing the end of another financial year which closely follows the May Budget announcements relating to superannuation. In this bulletin, we are specifically drawing attention to those individuals who are eligible to make contributions to superannuation as there is a definite 2 year opportunity to contribute at the current maximum levels of $30,000 or $35,000 per annum depending on your age (refer table below).
If current proposed legislation in the Budget is successfully passed, the maximum contribution for 2017/18 tax year is being reduced to $25,000 per annum. Hence there is an opportunity which should not be missed to effectively build your superannuation balances.
As such, should you wish to take advantage of current limits by 30 June we would encourage you to act now.
|Type of Super Contribution and Limit (Cap)||2015/16|
|a) Standard concessional contribution cap (per annum)||$30,000|
|b) Temporary (higher) concessional contribution cap (per annum) for people age 49 and over on 30 June 2015||$35,000|
|c) Non concessional contribution cap|
|- Standard (per annum)||$180,000|
|- Bring forward (over 3 years) if triggered under age 65||$540,000|
Concessional contributions include employer contributions (such as the Super Guarantee and salary sacrifice), as well as personal contributions claimed as a tax deduction (persons self-employed or not employed).
Non-concessional contributions include personal contributions from after-tax money.
Given proposed legislation surrounding non concessional contribution caps and the suggestion that the lifetime limit of $500,000 will be backdated to 2007 from the 2016 Budget night, the $500,000 expected limitation should not be breached. Ie if no non concessional contributions have been made previously, no more than $500,000 should be contributed. Before making any new non-concessional contributions (NCC), please contact us to discuss.
Review your salary sacrifice super contributions for 2016/17
The Super Guarantee (SGC) rate will again be 9.50% for 2016/17. Note that some employers pay more than the statutory SGC rate, so it is worth checking this with your employer. If you make salary sacrifice super contributions and your salary increases for 2016/17, you will need to make allowance for the increased SGC and may need to change your salary sacrifice amount to stay within your Concessional Contributions (CC) cap for 2016/17.
Other year end strategies
Please refer to the attached flyer (click here) for other strategies that may apply to you.
If you require any assistance or wish to review your position, please do not hesitate to contact us on 9239 0000.