Catch-up superannuation contributions have just become a staple of tax management strategies under the changes which came into effect on 1 July, according to wealthdigital technical manager, Rob Lavery.
Pointing to the changed arrangements under which the unused portion of a previous year’s concessional contribution cap can be carried forward, Lavery said the strategic opportunities were “immense”.
“Capital Gains Tax (CGT) bills can be controlled by deductions, high taxable incomes can be reduced and bonuses can be added to super tax-effectively,” he said. “Catch-up contributions just became a staple of tax-management strategies.”
However, he said the biggest change which came into effect from 1 July was that lifetime income streams purchased after that date were subject to different social security rules.
He pointed to asset test concessions of 40 per cent up to the owner’s 85th birthday, and 70 per cent thereafter, as well as an income test concession of 40 per cent.
He said these represented attractive propositions for some clients.
The peak body stressed that the proposed financial advice reforms should “pass as soon as possible” and has thrown its weight behind super funds providing a greater level of advice.
Economists from the big four banks have all predicted the RBA to deliver another rate cut during its July meeting; however, some admit the decision will be a close call.
Morningstar believes there is still further to run with the potential takeover of Insignia Financial even with original bidder Bain Capital walking away.
Insignia Financial has announced the status of the two private equity bidders as due diligence comes to an end.