Two superannuation bills, which include the proposed introduction of the $1.6 million transfer balance cap and changes to concessional contributions, have been passed by both houses of Parliament.
The Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 amends five separate acts including:
•the introduction of a $1.6 million cap on the amount of capital that can be transferred to the tax-free earnings retirement phase of superannuation; and
•the proposed reduction to $250,000 (from $300,000) of the threshold at which high-income earners pay division 293 tax on their concessional taxed contribution to superannuation
The Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016 imposes an excess transfer balance tax on the notional earnings of capital moved into a retirement phase superannuation account that is in excess of $1.6 million.
The passing of the bills should provide clarity and much needed certainty of what the new rules, thereby enabling advisors to fully assess the impact on their clients over the next seven months before the changes come into effect from 1 July 2017.