Reduction in CC cap
Status: Passed
Effective: 1 July 2017
The concessional contribution (CC) cap will reduce to $25,000 pa for all individuals regardless of age. The cap will be indexed in line with AWOTE in $2,500 increments. Clients with sufficient surplus cashflow could use the opportunity to maximise CCs for amounts made before 1 July 2017 up to $35,000 for those who were 49 or over on 30 June 2016 and up to $30,000 for those under age 49.
SMSF trustees should be mindful from 1 July 2017 of unallocated reserves if any which may, when allocated, get counted towards the CC cap.
Changes to NCC cap
Status: Passed
Effective: 1 July 2017
The non-concessional contribution (NCC) cap will reduce from $180,000 to $100,000 pa. Individuals cannot make NCCs if they have a total super balance of $1.6 million or more at 30 June of the previous financial year. Eligible individuals will be able to access a three year bring forward of up to $300,000. Transitional measures will apply to the bring-forward rule.
Clients with sufficient capital available could maximise the opportunity by using the bring forward rule of up to $540,000 before 1 July 2017, especially those whose account balance is $1.6 million or more. With the removal of anti-detriment payments going forward, this may be useful if clients are looking to implement a re-contributon strategy.
