How might the Budget affect you?

Written on the 10 May 2016

Want to know how the Budget might affect you?  Colleen Walter of Beyond Horizons Financial Planning has kindly offered the below summary of changes affecting businesses and those nearing retirement:
  • Reduced concessional contributions to super from $35,000pa for over 50's and $30,000pa for under 50's to $25,000pa for everyone from 1 July 2017.  This also includes the employer contribution.  Unused portions of the cap can be carried forward for five years
  • A lifetime non-concessional contribution cap of $500,000.  This includes contributions since 1/7/2007.
  • A maximum of $1.6M to transfer to pension phase.  Anyone with a balance exceeding this at present will need to remove it by either transferring it back to super phase or withdrawing it altogether.
  • Non-concessional contributions made after Budget night that exceed the cap (taking into account all non-concessional contributions since 1 July 2007) will need to be removed or be subject to the current penalty tax arrangements.
  • The lifetime non-concessional cap will replace the existing annual non-concessional contributions cap of up to $180,000 per year (or $540,000 every 3-years under the bring-forward rule for individuals aged under 65).
  • Those aged 65 to 74 who are currently limited to $180,000 per year will have access to the $500,000 cap without having to meet a work test.
  • The tax exempt status of Transition to Retirement pensions will be removed from 1 July 2017. 
  • Personal income tax threshold of 32.5% will be increased from $80,000pa to $87,000pa from 1 July 2016.
  • Company tax rate to be reduced to 25% over the next ten years.  However, small businesses with a turnover of less than $10M (up from $2M) will have a reduction from 1 July 2016 from 28.5% to 27.5%
  • As of 1 July 2017, Australians under 75 will be able to claim an income tax deduction for any personal contributions made to a complying super fund up to their concessional cap (includes employer contribution). This allows employees who cannot salary sacrifice as well as self-employed, to claim a deduction for their personal contributions up to the value of the cap. Individuals will need to notify their super fund or retirement savings provider of their intention to claim the deduction, before lodging their tax return.

For further information contact Colleen Walter:

Ph 0427 257977
Email waltercl@iinet.net.au

The above is not advice and provides information only. It does not take into account your individual objectives, financial situation or needs.  Investors should consider talking to their Financial Adviser before making an investment decision.

 

"Colleen Walter CFP Dip FP (Authorised Representative Number 235702)
of Beyond Horizons Financial Planning is an Authorised Representative
of Securitor Financial Group Ltd AFSL 240687"

 


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