Recent changes affecting super contributions
From 1 July 2017, the following key changes to the contribution rules now apply:
- Personal non-deductible contributions
- Reduced contribution limits – The annual contribution limit has been reduced from $180,000 to $100,000 per person. Furthermore, the $540,000 bring forward amount has been reduced to $300,000.
- New $1.6 million superannuation balance restriction – An individual who has total superannuation entitlements of at least $1.6 million at the start of an income year will not be able to make non-concessional contributions in that year without breaching their limit.
- A reduced deductible contributions limit – The annual limit in respect of deductible contributions has been reduced from $30,000 or $35,000 (depending on the individual’s age) to $25,000 for all individuals.
- Claiming deductions for personal (after-tax) contributions – From 1 July 2017, an individual will generally be able to deduct personal (after-tax) contributions irrespective of their work status (i.e., whether or not they are an employee) and irrespective of the level of any salary income derived during the relevant income year.
- Additional 15% tax liability on contributions for people earning more than $250,000 – From 1 July 2017, individuals earning more than $250,000 will generally be liable to pay an extra 15% tax on deductible contributions (including employer contributions) received by their superannuation fund.
- Extending the tax offset for spouse superannuation contributions – From 1 July 2017, the existing tax offset of $540 (maximum) for spouse contributions will generally be available to a taxpayer who makes superannuation contributions for the benefit of a spouse whose income is less than $40,000 (up from $13,800).
Contact us to find out how these changes affect you