17 April 2024
Elston Quarterly Portfolio Update Q2 2024
In this video, Portfolio Manager David Seager provides his perspective on the key questions discussed in the recent quarterly asset allocation meeting. Read more
On Wednesday 6 November 2013, the Government announced a decision to abandon some of the previous Government’s tax and superannuation proposals. The announcement also indicated which of the unlegislated proposals would proceed.
Tax on Pension Earnings
A proposed tax on superannuation pension earnings above $100,000 has been abandoned. This would have taxed investment earnings on existing superannuation investments in pension phase and was due to start on 1 July 2014.
This proposed tax was going to be very complex and difficult to administer for superannuation funds. In light of this, the new Coalition Government chose not to proceed with this measure.
Low Income Superannuation Contribution
As flagged prior to the election, the Government confirmed that it will repeal the Low Income Superannuation Contribution (LISC). The LISC was a government contribution to people earning under $37,000 per year that ensured that they would not pay more tax on their compulsory superannuation contributions than they do on their income. This contribution will no longer be available from the 2013-14 income year and onwards.
Concessional Contribution Caps
An important change to superannuation which was not changed was the increased concessional contribution cap for those aged 60 and over in 2013-14 and 50 and over in 2013-14. From 1 July 2013 taxpayers aged 60 and over will have a $35,000 cap, and, from 1 July 2014 taxpayers aged 50 and over will have a $35,000 cap.
Excess Contribution Tax
The new Excess Contribution Tax (ECT) regime for concessional contributions will proceed as announced by the previous Government. This will allow taxpayers that have exceeded their concessional contribution cap after 1 July 2013 to withdraw the excess contribution from their superannuation fund with the excess contribution being taxed at the taxpayer’s marginal rate.
If you think that any of these changes may apply to you, and wish to seek further clarification on the potential impact, please contact your Elston Partners adviser.
The above information is general information only and not intended to be advice. As a result it should not be relied upon by any person to make personal financial decisions. Individuals should seek personal financial advice that considers their personal circumstance.
