As you will have heard superannuation reform bills have now been passed by both houses and await royal assent – here’s what you need to know:

• Reduction in the non-concessional cap to $100,000 p.a (bring forward reduced to $300,000 for those eligible). Individuals with a super balance of more than $1.6m will no longer be eligible to make non-concessional contributions from 1 July 2017. This limit will be indexed and tied to the pension cap of $1.6m
• Introduction of the $1.6M pension cap. The effect is that member’s will be able to have up to $1.6M in pension phase where the investment income is not taxed. Any superannuation balance over this amount will have its earnings taxed at 15%
• There are transitional CGT relief rules that will be able to be used where a member in pension phase has a current balance greater than $1.6M. The key impact of this is the ability to restate the cost price of assets to their market value as at 1 July 2017
• Reduction of concessional contributions to $25,000 for all members eligible to contribute
• Removal of the tax exemption applied to Transition to Retirement Income
• Catch up concessional contribution measures to come into place from 1 July 2018
• Lowering of the income tax threshold where contributions are taxed at 30% from $300,000 to $250,000
• The requirement to be able to claim a deduction for personal superannuation contribution will no longer require earning less than 10% of your income from employment.

With the majority of these changes coming into effect in seven months’ time, Bentleys NSW is viewing this as a window of opportunity, whereby implementing the correct super strategies now will maximise your retirement goals.

Get professional advice to consider your exact circumstances.