Reducing super tax concessions for very high income earners
Legislation to reduce the tax concessions associated with certain concessional superannuation contributions (CCs) made by or on behalf of ‘very high income earners’ is now law. As these measures are effective from 1 July 2012 they may impact on the current remuneration and related financial plans of ‘very high income earning’ individuals.
The measures will impose an additional tax of 15% on certain CCs where the individual’s income plus relevant concessional contributions exceed $300,000.
Increased concessional contributions cap
Legislation to implement the higher concessional contributions (CC) cap for older Australians that was announced by the Government on 5 April 2013 is now law. The legislation increases the CC cap to $35,000 in 2013/14 for individual’s aged 60 and over, and to $35,000 in 2014/15 and later financial years for those aged 50 and over.
The higher cap of $35,000 replaces the previously announced cap that was to apply from 1 July 2014 for individuals aged 50 years and over with superannuation balances below $500,000. The Government is no longer proceeding with this proposal in light of feedback from the industry that the balance requirement would be difficult to administer.