2013 budget and your super
Concessional contributions. Currently capped at $25,000 per annum for everyone, in the 2013/2014 year they will increase to $35,000 for individuals over age 60. From the 2014/2015 year and onwards, the cap will be $35,000 for everyone over age 50.
Although the cap increase is considered temporary, projections show it extending to the 2018/2019 year.
Pension assets tax. From 1 July 2014, pensions earning above $100,000 will be subject to a new 15% tax. The point to remember about this is that the tax will apply to the earnings of a fund, not the assets. This means that in a year of good financial returns, pensions with fewer assets may be pushed above the earnings threshold and attract the 15% tax.
In the case of a Self-Managed Super Fund (SMSF) with multiple members, a government media release issued on 5th April 2013 explains that the tax will apply to an individual’s earnings rather than at the fund level.
Superannuation Guarantee increase. From 1 July 2013, the Superannuation Guarantee (SG) percentage will increase from 9% to 9.25%. This is the first of a planned series of increases expected to raise the SG percentage to 12% by 2019.
Excess contributions tax. From 1 July 2013, contributions made in excess of the contributions cap will attract a tax at the individual’s marginal tax rate plus an additional interest charge. Previously the penalty was simply that excess contributions were taxed at the highest marginal tax rate.
This means that those already in the highest marginal tax bracket will pay the new interest charge in addition to the tax.
Related parties. New laws proposed from 1 July 2013, will aim to increase the transparency of acquisitions and disposals between SMSFs and related parties. This will improve the ability of approved auditors and the Australian Taxation Office (ATO) to monitor transactions.
Auditor registration. From 1 July 2013, SMSF trustees will be required to appoint auditors specifically registered with the Australian Securities and Investments Commission (ASIC).
Strict penalties. Stricter penalties will apply to SMSFs from 1 July 2013 where the following has occurred:
- illegal early release of superannuation
- non compliance with laws governing:
- administration
- directions to rectify contraventions
- instructions to undertake SMSF education.
Asset valuation. From the 2013/2014 income year onwards SMSF trustees must report the market value of assets in financial accounts. The ATO has published a Guideline to assist trustees in valuing SMSFs. (http://www.ato.gov.au/superfunds/content.aspx?doc=/content/00328213.htm)
SMSF registration and rollover. From 1 July 2014, an SMSF’s identity and bank account details must be evidenced before the fund is established or when members roll their money into it.
Please call us on 02 9318 6400 or email fred.tortora@surrypartners.com.au if you would like clarification of any of these points.
Sources:
www.superguide.com.au Federal Election: new super changes summary (April 2013)
www.superguide.com.au Federal budget May 2013 Newsletter (14 May 2013)
www.superfuture.gov.au Super. Your money. Your future. (Copyright Australian Taxation Office)
www.ministers.treasury.gov.au Media release No 021 (5 April 2013)