Small backdown on non-concessional cap changes

In a recent newsletter, we discussed why we thought the sweeping changes to superannuation announced in this year's Federal Budget were bad for retirement planning. In particular, our assessment of the changes to the non-concessional contribution caps was that they were unnecessarily aggressive and retrospective. We highlighted a situation where, because the changes were to apply from Budget night, there might arise a situation where a person had entered a contract for an asset (such as property) prior to Budget night and yet was relying on non-concessional contributions made after Budget night to fulfil the contract.

We weren't alone in these concerns. Writing to the SMSF Owner's Alliance the Federal Treasurer has advised that transitional arrangements will apply to this very situation. SMSFs that were in the process of buying an asset and had entered into a contract before Budget night, but were relying on non-concessional contributions made after Budget night to complete the purchase, will be permitted to accept sufficient non-concessional contributions to fulfil the contract, even if this means that the member will exceed the new lifetime cap, provided the contributions are within the constraints of the old caps.

Transitional arrangements will also apply for SMSFs that have borrowings and rely on non-concessional contributions to fulfil the legal obligations of the borrowings, but only up until 31st January 2017.

This is welcome news, but coming almost two months after the Budget announcement, it may be too late for some account holders who were obligated to fulfil a contract in the time between Budget night and this clarification. It's this perpetual uncertainty in Superannuation, fuelled by successive Government policy changes, that is of most concern to us, as confidence in Superannuation as a retirement planning tool is increasingly undermined.

Posted: July 08, 2016 | 0 comments

The news from Dewings

In this issue of our newsletter, we take a more indepth look at the superannuation changes that were announced in the recent Federal Budget. We have also included a reminder about the company tax rate for small businesses which has been reduced from 1st July.

You can read the full version here.

Posted: July 07, 2016 | 0 comments

SuperStream Extension

The Australian Taxation Office (ATO) has extended the deadline for small businesses to make themselves SuperStream ready. The cut-off date had been 30th June 2016 but the ATO has recognised that some small business may still need a little more help. To facilitate this, that implementation date has been pushed back to 28th October 2016.

Just as a recap, SuperStream is part of the Government's overall plan to reform the Superannuation system. SuperStream is intended to improve the process of receiving contributions and processing rollovers, and cut the associated administrative costs, while also reducing the number of lost and/or unclaimed accounts. As a part of this, most Superannuation Funds need to be ready to receive contributions by electronic means, while most employers need to ensure that their payroll systems can submit contributions electronically.

For the most part the system has been implemented. The last stage was for small business employers (those with 19 or fewer employees) to make their systems ready by 30th June 2016. This announcement provides an extension to that final component.

For more information, please have a look at previous newsletters or consult the ATO website.

Posted: July 06, 2016 | 0 comments