October 2016 Edition

In this edition:

Welcome

Small Business Mental Health Initiative

Further superannuation legislation released

Aged, disability and home care with DRC Care Solutions

On 27^th September 2016 the government released more draft legislation implementing a number of the changes to superannuation legislation. Following the 2016 budget, legislation has been drafted to regulate amounts held in super, concessional contribution caps, the contributions tax threshold and transition to retirement amendments. NB: This is still in a draft stage.

Summary of changes and how this impacts you:

• $1.6 million transfer balance cap: from 1 July 2017, a member who has reached preservation age is only entitled to transfer a balance of $1.6 million into the tax-free phase of retirement. This means any excess funds in super must remain in an accumulation account, taxed at 15%. If a member has already retired and currently has funds in tax-free accounts in excess of the cap, will be required to reduce this balance down to $1.6 million by 1 July 2017.

• Concessional contributions cap: you can currently contribute up to $30,000 (under age 50) and $35,000 (age 50 and over) each year. From 1 July 2017, the cap will be reduced to $25,000 for all taxpayers, regardless of age.

• Division 293 Excess Contributions Tax: the current income threshold is $300,000, proposed to drop to $250,000. From 1 July 2017, taxpayers above the $250,000 threshold who make concessional contributions in excess of the above concessional cap of $25,000 will be liable to pay tax at marginal rates on the excess amount.

• Catch-up payments for taxpayers with super balances less than $500,000: from 1 July 2017, any unused concessional caps (i.e. annual threshold of $25,000) will rollover for 5 years to allow for catch-up payments, with no excess contributions tax to pay.
  
  

If you have any concerns regarding the above or would like to discuss your options, please contact our team for further information.