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.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
Senator Jane Hume will join the speaker lineup at the inaugural Australian Wealth Management Summit.
New research from ART has found less than a third of women feel their superannuation is in a good position, reiterating the importance of opening up the advice arena to super funds.
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