By James Nott, B.Com, CA, CTA
Most taxpayers who have a Self-Managed Superannuation Fund are aware that significant changes to the rules will start on 1 July 2017.
• Individual concessional contributions will be limited to $25,000 per annum
• Non-Concessional contributions will be limited to $100,000 per annum
Furthermore when a Superannuation member has accumulated a $1.6 million balance, no further non-concessional contributions can be made.
If you have a balance in excess of $1.6 million and are in receipt of a pension from the Fund, you are required to transfer the excess to an accumulation account in the Fund. The income from this new accumulation account will be taxed at 15% with any capital gain taxed at 2/3rds of the gain, provided the asset has been held for at least 12 months.
Taxpayers in receipt of a pension from the fund are likely to suffer a reduced pension as the balance of their pension account will reduce as a result of the new measures.
So the Government has given some relief to compensate those disadvantaged by only taxing the growth from 1 July 2017. This works by the Fund revaluing the assets at 1 July 2017. The details must be reported to the ATO by the due date for lodgment of the income tax return for the year ended 30 June 2017.
The new measures are potentially helpful, but are complicated, and will require careful thought in the months ahead.