The Senate has now passed the key Bill that gives effect to the much discussed superannuation reforms. These measures will affect many doctors, as previously discussed in my article on this topic (click HERE).
The key measures affecting Doctors include:
• Introducing a $1.6 million transfer balance cap that limits the amount that can be transferred to the retirement phase, where earnings are tax-free. This measure will also apply to death benefit income streams.
• Reducing the concessional contributions cap to $25,000 p.a. for all taxpayers.
• Reducing the non-concessional contribution cap to $100,000 pa (or $300,000 under the bring forward provisions), limiting the ability to make NCCs to people who have a total superannuation balance of less than $1.6 million and introducing transitional rules for those who triggered the bring forward rule prior to 1 July 2017.
• Increasing the annual income threshold from $10,800 to $37,000 for eligibility for the spouse contribution tax offset.
• Removing tax exempt earnings for transition to retirement income streams.
• Lowering the income threshold for Division 293 tax to $250,000.
The Bill will now need to receive Royal Assent before it is formally law. This is generally accepted to be a mere formality.
Please contact me on 08 6160 5918 or firstname.lastname@example.org if you require any advice regarding these changes, as doctors will need to plan sooner and smarter to accumulate tax-effective wealth going forward.