On 1 July 2017 rule changes will come into effect that may impact your retirement strategy and possibly the contributions you make into superannuation.
- The cap on concessional (pre-tax) super contributions will reduce from $30,000 pa or $35,000 pa (depending on age) to $25,000 pa.
- An additional 15% tax on concessional contributions will be payable by people with incomes greater than $250,000 pa (currently $300,000 pa).
- The cap on non-concessional (after-tax) super contributions will reduce to $100,000 pa (currently $180,000 pa) and $300,000 when using the ‘bring-forward’ rule (currently $540,000). Other conditions also apply.
- Non-concessional contributions will not be able to be made if you have a total superannuation balance over $1.6 million.
It’s important to review your current contribution strategy to assess the impact of these changes and any amendments that may be required. Care should be taken to avoid contributing in excess of the contribution caps, as this can result in tax penalties.