Several Bills containing important superannuation measures which may impact you have passed both Houses of Parliament. These measures have now also received Royal Assent, which is the final step required for a parliamentary bill to become law.
The two changes which affect self-managed superannuation funds are:
span>1. Treasury Laws Amendment (More Flexible Superannuation) Bill 2020: which extends the three year non-concessional contribution bring forward rule to individuals under age 67. This measure is effective 1 July 2020.
Two important amendments were made to the Bill to provide for:
Removal of the excess concessional contribution charge
Starting 1 July 2021, the excess concessional contribution charge will be removed. The excess concessional contributions charge is an interest penalty that applies to the increased tax liability due to adding excess concessional contributions to assessable income.
Excess concessional contributions will still be automatically added to an individual's personal assessable income and taxed at personal marginal tax rates. Individuals will also remain entitled to non-refundable tax offset equal to 15%.
COVID-19 re-contributions
If an individual made an early super withdrawal under the former COVID-19 condition of release, they may re-contribute these amounts without it counting towards their non-concessional contributions cap.
To be eligible, re-contributed amounts must be made between 1 July 2021 and 30 June 2030. The total amount of contributions covered under this exemption must not exceed the COVID-19 release amount. An individual will not be eligible to claim a personal tax deduction on amounts they elect to treat as COVID-19 re-contributions.
span>2. Treasury Laws Amendment (Self-Managed Superannuation Funds) Bill 2020: permits the maximum number of members allowed in a self-managed superannuation fund and small APRA fund to increase from four to six. This measure will commence from 1 July 2021.
You should note that some states including NSW only permit up to four individual trustees. Members who are impacted by state-based law limitations may wish to consider a corporate trustee if they wish to expand the SMSF to five or six members.
How can we help?
If you have any questions, require assistance or would like further clarification with any aspect of above superannuation changes, please feel free to contact us on 1300 885 761 .
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