The Major Parties’ Superannuation and Tax Policies

The Major Parties’ Superannuation and Tax Policies

The federal election has been called for May 18 and both major parties have outlined their superannuation and tax policies. With the federal election only weeks away many of our clients have been asking what the major political parties’ policies are that may impact their SMSF, individual taxation circumstances or personal investments.

If you would like more information on a particular policy announcement, please do not hesitate to contact our office to set up a time to discuss any requirements you may have.

Liberal-National Coalition

Superannuation
  • Australians aged 65 and 66 will be able to make voluntary superannuation contributions without needing to work a minimum amount. Previously, this was only available to individuals below 65.
  • Extending access to the bring-forward arrangements (the ability to make three years of post-tax contributions in a single year) to individuals aged 65 and 66.
  • Increasing the age limit for individuals to receive spouse contributions from 69 to 74.
  • Reducing red-tape for how SMSFs claim tax deductions for earnings on assets supporting superannuation pensions.
  • Delaying the implementation of SuperStream (electronic rollovers for SMSFs and superannuation funds) until March 2021 to allow for greater usability.
Taxation
  • From 2018-19 taxpayers earning between $48,000 and $90,000 will receive $1,080 as a low and middle income tax offset. Individuals earning below $37,000 will receive a base amount of $255 with the offset increasing at a rate of 7.5 cents per dollar for those earning $37,000-$48,000 to a maximum offset of $1,080.
  • Stage 1 tax cuts: From July 1 2018, increasing the top threshold of the 32.5 per cent tax bracket from $87,000 to $90,000.
  • Stage 2 tax cuts: From 1 July 2022, increasing the top threshold of the 19 per cent personal income tax bracket from $41,000, to $45,000.
  • Stage 3 tax cuts: From 1 July 2024, reducing the 32.5 per cent marginal tax rate to 30 per cent which applies from $120,000 to $200,000. The 37 per cent tax bracket will be abolished.

Australian Labor Party

Superannuation
  • Disallowing refunds of excess franking credits from 1 July 2019 – this would mean SMSF members in pension phase no longer receive refunds for the franking credits they receive for their Australian share investments.
  • Banning new limited recourse borrowing arrangements.
  • Reducing the post-tax contributions cap to $75,000 per year down from $100,000.
  • Ending the ability to make catch-up concessional contributions for unused cap amounts in the previous five years.
  • Ending the ability for individuals to make personal superannuation tax deductible contributions unless less than 10 per cent of their income is from salaries.
  • Lowering the higher income 30per cent super contribution tax threshold from $250,000 to $200,000.
Taxation
  • Labor supports the stage 1 tax cuts and will match the $1,080 low and middle income tax offset. From 1 July 2018, individuals earning below $37,000, will get a $350 a year tax offset, with this amount increasing for those earning between $37,000- $48,000 to the maximum $1,080 offset.
  • Introduce a 30 per cent tax rate for discretionary trust distributions to people over the age of 18.
  • Will limit negative gearing to newly built housing from January 1 2020. (Existing investments are grandfathered under the current law)
  • Reduce the capital gains tax discount for assets that are held longer than 12 months from the current 50 per cent to 25 per cent. (Existing investments are grandfathered under the current law)
  • Limit the deductions for the cost of managing tax affairs to $3,000.

How can we help?

If you have any questions or would like further clarification in regards to how the above policies may affect you and your fund, please contact us.

Read More
What Women Need To Consider When It Comes To Super

What Women Need To Consider When It Comes To Super

Today we celebrate International Women’s Day and with this year’s campaign theme #BalanceforBetter – better the balance, better the world; what a great time to start working on maximising your super.

Whilst we are working towards correcting the balance between the genders, unfortunately, on average, women have much lower super balances.

Three key reasons why;

  • On average women earn less than men.
  • Women are more likely than men to take a career break to raise their children.
  • Some women choose to return to work on a part-time basis until their children are older.

All this results in lower contributions and will have a greater impact on their super balance.

What can you do to maximise your super?

There are several steps you can take to start planning.

1. Get Super Smart

Understand where all your super is, how much super you have, what investments you are in, what fees you are paying and what insurances you have through your super fund and if they are adequate.

2. Look at growing your contributions

You can ask your employer to pay part of your pre-tax salary into super, this can be a very tax effective way of growing your super. You can also make further contributions out of your own pocket – also known as after-tax super contributions.

3. Spouse Contribution

Your partner may be able to assist you in boosting your super balance by either spouse contributions or contribution splitting.

4. Get help from a professional

Financial planning can be complex and overwhelming at times. At PrimeAdvisory we will work with you to give a better understanding of your options and get you on track to maximize your super balance for retirement.

A super story:

“PrimeAdvisory were really good at helping me get organised. I had 6 super funds, which were all over the place. They helped me get it sorted out so our net asset position was understood. It helped me know my total asset position and how much wealth we had. At 53, it was important to see a pathway to retirement, how we will fund it and maintain our lifestyle. Having an independent source to facilitate a discussion around finances with my husband also helped bring out the differences between our ambitions and what we want to do in retirement, lifestyle-wise. Working with Guy helps us have those conversations.”Carolyn, 54, Financial Services Executive

To start a conversation about getting on track and planning for retirement contact us today on (02) 9415 1511.

Read More
Superannuation Reforms – are you 30 June 2017 ready?

Superannuation Reforms – are you 30 June 2017 ready?

Your Superannuation & the Reforms – what it could mean for you

The superannuation reforms announced in the 2016-2017 Federal budget have passed Parliament and will come into effect from 1 July 2017. Previous changes that the Howard government introduced in 2007 which allowed contributions up to $1million were significant. There have been changes since then but these are the biggest changes seen in a decade.

The reforms have a huge impact on the ability to contribute funds to superannuation. The superannuation environment is the most tax friendly environment and these changes will now limit the amounts you can contribute. It is time to consider the impact these changes may have on you and consider any action you may need to take before 30 June 2017. It is imperative right now to make sure you are making full use of what you can within the current rules. Our team are ready to discuss your situation & help you make informed decisions now and to plan for your future.

With the reform that will reduce the tax-free limit in pension phase to $1.6 million, it is important to maximise the exempt current income amount. This must be looked at on an individual or SMSF member basis to work out the balance of pension and/or accumulation amounts. There is no ‘one size fits all’ approach.

In moving from the current rules to the new rules there are various choices and options to be looked at regarding CGT cost bases and the outcomes that could have a significant impact for the future. Any changes to your current situation need to be finalised before 30 June 2017.

If you are under 65 and making non-concessional contributions to superannuation, the reforms reduce the cap and change the ‘bring forward’ rule which will limit the amount you can contribute in any one year. Taking advantage of the bring forward rule now will utilise the current caps and allow you to maximise these contributions before the changes come into effect.

There may also be some steps to consider for succession planning in self-managed super funds as the current estate instructions in place may not be relevant to you & your partner after 30 June 2017.

Read the full article for further details or you can contact us to have a chat to one of our team

You can’t just sit back and wait – 30 June 2017 superannuation reforms could have a lasting impact on your future. Some plans will need to be made and finalised in the 2017 financial year and some will be ongoing. Make the most of the next 3 months.

How can we help?

Our accounting  specialists are ready to assess your situation and provide the various strategies to our wealth advisors who will deliver the advice and implementation plan to you so are 30 June 2017 ready.

Contact us now 
Read More

SIGN UP

For our free e-newsletter

TAKE A HEALTH CHECK

For our free e-newsletter

Personal