BREAKING NEWS – Proposed Budget Changes may reduce Tax Benefits

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There is growing speculation that changes will be made to the taxation treatment of Transition to Retirement Income Streams (TRISs) in this year’s Federal Budget. These changes may see a reduction in the tax benefits which currently apply to these pensions and associated strategies.

Whatever changes are announced to TRISs, we believe it is unlikely those changes will apply to TRISs which were commenced prior to this year’s Federal Budget. The Treasurer has previously stated that the Government will not be making changes to the superannuation tax concessions which adversely impact on those who are already in the pension phase.

If you are over age 56, and have not yet commenced a TRIS, it might be worth doing so before this year’s Federal Budget. This should enable you to lock in the existing tax benefits associated with a TRIS if changes to the TRIS rules are announced in this year’s Federal Budget.

If no changes are announced to TRISs in this year’s Federal Budget, the adverse consequences of having commenced a TRIS in anticipation of changes are likely to be minor. Some administration costs may be incurred when the TRIS is commenced, and if the pension is subsequently wound up and the proceeds rolled back to the accumulation phase. It is also a legislative requirement that you receive at least your pro-rated minimum pension payment for the financial year prior to the pension being wound up.

If you would like to know more about how we may be able to help you plan for your future, call on 1300 99 77 34 or email your enquiry to FinancialOptions@chan-naylor.com.au for a complementary initial consultation.

 

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