Tax Updates for the 2016-2017 Financial Year

Lowering of the Annual Non-Concessional Contributions Cap for Taxpayers:

In September of 2016, the Australian Government announced a change to the superannuation measures that were formerly declared in the May 2016 Budget.

The proposal now stands to lower the existing non-concessional (post-tax) contributions cap from $180,000 to $100,000 per annum with a three-year bring forward period for individuals aged 64 or younger (ie: $300,000 over three years). Access of this bring forward provision depends on the individual's total super interest balance. It must be less than $1.6 million at 30 June of the previous financial year.

The new $100,000 per annum cap is intended to start from 1 July 2017. 

 

Simplifying Concessional Contribution Rules:

  • Beginning 1 July 2017, anyone can make concessional super contributions, regardless of their employment situation. This includes self-employed individuals.
  • Concessional contribution limits will be reduces to $25,000 per year (flat) starting 1 July 2017, regardless of age.
  • Also, the additional 30% tax rate applied to contributions of income earners over $300,000 will now be applied to those with incomes over $250,000.

 

Low Income Superannuation Tax Offset:

Beginning 1 July 2017, up to $500 of the 15% super tax rate will be available to low income earners as a tax offset for taxpayers with an adjusted taxable income of less than $37,000. 

 

Removal of the Work Test:

The ATO is removing the Work Test for those over 65 years old. This allows taxpayers aged 65 to 74 to freely contribute money into superannuation being subject to the same rules as everyone else aged 64 years and under. This is set to begin 1 July 2017.

 

 

Be sure to check back here for even more 2016-2017 tax updates. As the ATO announces these changes, we'll provide you with the need-to-know!