Superannuation Alert 29.09.16

Financial Services eBulletin - 29 September 2016

The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.

On 27 September 2016, the Treasury released the second round of exposure draft legislation and explanatory material in relation to its "Superannuation Reform Package" to implement measures announced in the 2016-17 Federal Budget for public consultation. The following table sets out the relevant exposure drafts and the measures proposed. Submissions on these exposure drafts close on 10 October 2016.

Exposure Draft   Measures

Exposure draft: Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016

 

 

 

 

 

 

 

 

 

 

According to the Explanatory Material, the proposed measures include:

  • a transfer balance cap of $1.6 million (indexed to the Consumer Price Index) from 1 July 2017;
  • a reduction of the concessional contributions cap to $25,000;
  • a reduction in the Division 293 tax threshold to $250,000;
  • a removal of the "income tax deduction available to a complying superannuation fund, or approved deposit fund that pays an increased superannuation lump sum, because of the death of a member for the benefit of their spouse, former spouse or child, to compensate for income tax paid by the fund in respect of contributions made for the member during their lifetime" (anti-detriment payments);
  • a removal of the "income tax deduction available to a complying superannuation fund, or approved deposit fund that pays an increased superannuation lump sum, because of the death of a member for the benefit of their spouse, former spouse or child, to compensate for income tax paid by the fund in respect of contributions made for the member during their lifetime" (anti-detriment payments);
  • the introduction of an ability for "individuals with a total superannuation balance of less than $500,000 at the end of a financial year to make additional concessional contributions in the next financial year by accessing unused concessional contribution cap amounts carried forward from the previous five years"; and
  • an amendment to the earnings tax exemptions in the Income Tax Assessment Act 1997 in order to extend the earnings tax exemption to "new innovative retirement income products that are deferred superannuation income streams (including guaranteed annuities and group self-annuities)" and to remove the exemption in respect of transition to retirement income streams.
Exposure draft: Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016   This exposure draft Bill proposes an excess transfer balance tax of 15% of a person’s "annualised notional earnings on excess transfer balance for the financial year" in respect of people who have not previously been liable to pay excess transfer balance tax and 30% in respect of people who have previously been liable to pay excess transfer balance tax.
     
Exposure draft: Treasury Laws Amendment (Fair and Sustainable Superannuation) Regulation 2016   According to the Explanatory Statement, this regulation amends the "Income Tax Assessment Regulations 1997 to remove the ability for individual’s to elect to treat certain payments as superannuation lump sums".

 

 

Further information

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.

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