We all have limited time to contribute and build up our super to fund our retirement at concessional tax rates. From 1 July 2017 a raft of changes will come into effect to limit how much we can put into super. Concessional (before tax contributions) will be reduced to $25,000 for everyone. Non-concessional (after tax) contributions will reduce from $180,000 per annum currently to $100,000 per annum.
Those nearing retirement have a one-off opportunity to contribute a total of $540,000 non-concessional (after tax) contributions into super before 1 July 2017 before the rules change forever. Using the “bring forward” rule this allows us to contribute up to 3 years of non-concessional contributions into super (provided you have not previously used this in the last 3 years). Currently allowable is $180,000 per annum times 3 years, a total of $540,000. From 1 July 2017 this will reduce to $300,000. You may need to act now if you were intending to sell off assets to fund the retirement. Income from funds in super up to $1.6 million balance are taxed at zero percent, whereas income from assets left outside of super are taxed at normal tax rates, up to 49% for income over $180,000.
Please be aware that the rules around contributions are complicated and exceeding your caps will have very adverse tax consequences, so always specific seek advice before implementing any super strategies.
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