Superannuation Rule Changes Pass Parliament
While all the talk in this last sitting week of parliament before the September election has been on the Labor leadership, there have been other things going on in Canberra. A number of the proposed changes to superannuation have passed into legislation and we have summarised these below.
Higher concessional contributions cap
The concessional contributions cap for individuals age 60 years and over from the 2013/14 financial year onwards will be increased from $25,000 to $35,000.
The concessional contributions cap for individuals aged 50 years and over from the 2014/15 financial year onwards will be increased from $25,000 to $35,000.
Previously the Government had announced their intention to ban off-market transfers to and from SMSF’s where the transaction was with a related party. This measure was specifically going to impact the tax-planning practice of selling listed shares to or from an SMSF to realise a tax loss (or gain) prior to the end of a financial year. This proposed change has been removed from the amended superannuation legislation that was passed by parliament on 25 June. The existing rules regarding off-market transfers continue to apply which specifically refers to asset transfers to be completed at market value and the valuation date to be used is when the transfer forms are ready to be lodged with the relevant registry.
Lower tax concessions for those earning over $300,000
This measure increases the tax paid on concessional contributions from 15 per cent to 30 percent for individuals with income above $300,000. This amendment applies to super contribution made in this current financial year 2012/13 and beyond.
This will apply to:
- Employer contributions
- Personal contributions which are claimed as an income tax deduction
- Contributions for defined benefit super interests (as determined by an actuary)
- Salary packaged contributions to constitutionally protected funds (eg. GESB West State Super)
The maximum SMSF Supervisory Levy will increase from $200 to $300 from the 2013/14 financial year. The actual levy amount for a specific income year is prescribed in the relevant regulations and was actually $191 for 2012/13 and will increase to $259 for 2013/14.
If you would like to discuss any of the above super amendments and their impact on your financial planning (or any other super issues), please contact us.
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