Pittwater Life February 2017 Issue

The CC cap is the limit
applicable to employer salary
sacrifice and tax deductible
contributions. At present
the maximum cap stands at
$35,000 for those who were
over 49 on 30 June 2016
otherwise it is $30,000. From
1 July the CC falls to $25,000
regardless of age.
The remainder of this
financial year therefore is a
final opportunity to make a
sizable deductible contribution
to super. With five months of
the financial year remaining
regular depositors to super
may wish to check their yearto-date
contribution levels
to ensure they will achieve
the goal, particularly where a
company payroll department
may need to be involved.
Similarly, those depositing
the maximum should be aware
of the lower threshold in the
2017/18 financial year as the
company payroll department
is unlikely to take the blame
for excess contributions in the
following year.
n Catch-up concessional
contributions
This change comes in from
1 July, 2018 but it should be
considered as part of the
amendments to concessional
contributions. Those with
balances under $500,000 will
be able to access a higher
annual cap and contribute the
remaining unused portion of
their CC cap on a rolling basis
over five years. Accrual of the
unused amount begins from 1
July, 2018. The thinking here is
that it will benefit people with
lumpy earnings or people who
move in and out of full time
and part time work. There is
also an opportunity for those
who may be contemplating the
sale of a capital gains taxable
asset to use this feature
to make a larger personal
deductible contribution.
n Changes to the nonconcessional
contributions
(NCC) cap
The NCC cap is the
limit applicable to nondeductible
superannuation
contributions. Currently, the
cap is $180,000 per annum
with the ability to make three
years ($540,000) of bring
forward contributions for
those under 65.
Over 65-year-olds can
currently contribute up to
$180,000 per year provided
that they have first passed a
work test of 40 hours (paid
employment) over a 30-day
period.
From 1 July, 2017 the NCC
will fall to $100,000 per year
with eligible persons being
able to access a three-year
bring-forward amount of
$300,000.
Alongside the introduction
of the lifetime pension transfer
cap, you will not be able to
make further NCCs if your total
superannuation balance from
the prior 30 June is greater
than $1.6 million.
Those with sufficient capital
and NCC caps can maximise
the opportunity by 30 June
using the bring-forward rule
to contribute up to $540,000
(per member), especially those
whose account balance is
already $1.6 million or more.
With changes this extensive
combined with the hard
deadline of 30 June, there
is urgency for trustees and
members to be on top of their
administration and lodgements
to have adequate time for
planning, consideration and
implementation of changes if
required.
Business Life
Brian Hrnjak B Bus CPA (FPS) LREA is a Director of GHR
Accounting Group Pty Ltd, Certified Practising Accountants,
Authorised Representative of Australian Unity Personal
Financial Services Ltd, ABN: 26 098 725 145, Australian
Financial Services Licence Number 234459 and licensee in
charge of AltRE Real Estate. Offices: Suite 12, Ground Floor, 20
Bungan Street Mona Vale NSW 2103 and Shop 8, 9 – 15 Central
Ave Manly NSW 2095, Telephone: 02 9979-4300, Webs: www.
ghr.com.au and www.altre.com.au Email: brian@ghr.com.au
These comments are of a general nature only and are not
intended as a substitute for professional advice. This article
is not an offer or recommendation of any securities or other
financial products offered by any company or person.
FEBRUARY 2017 51