ALP superannuation and tax reform

Read why 2019 is shaping up to be a very interesting year for superannuation and tax reform.

2019 shaping up to be a very interesting year

The following points outline some of the key ALP superannuation and tax reforms compared to the Coalition's super policies:

  1. Remove the ability for certain taxpayers to claim excess imputation credits for cash refunds. The Coalition has not indicated a desire to change the current ability for eligible taxpayers (incl individuals and SMSFs) to receive cash refunds for excess imputation credits
  2. Lower the annual non-concessional contributions cap to $75,000. The Coalition has not indicated a desire to change the current $100,000 NCC cap (indexed).
  3. Lower the Division 293 tax threshold to $200,000. The Coalition has not indicated a desire to change the current $250,000 Division 293 tax threshold.
  4. Repeal the newly introduced concessional contributions catch up rules. The Coalition would retain the new concessional contributions 5-year catch up rules for eligible members if they have a total super balance of less than $500,000 (at 30 June prior).
  5. Repeal the recent reforms allowing all eligible individuals to claim a tax deduction for personal super contributions. The Coalition would retain the recently legislated relaxation of the personal super deduction rules ie removal of the 10 per cent test from 1 July 2017.
  6. Prospectively restore the prohibition on direct borrowing by SMSFs on housing investments via Limited Recourse Borrowing Arrangements. The Coalition has not indicated a desire to change the current LRBA rules.
  7. End the freezing of the Superannuation Guarantee rate at 9.5% and fast track the employer compulsory contribution percentage to 12%, although firm dates have not been provided. The Coalition has not indicated a desire to change the current 9.5% Super Guarantee rate until the first increase in 2022 to 10% begins the gradual progression to 12% by 2026.

Please note that many of the above comments are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and applicability to their particular circumstances.

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Last Updated:21-05-2019 13:54