Since the handing down of the Federal Budget in May we have been working closely with a number of SMSF advocacy bodies, including SISFA (of which I am a Director and MGD a founding member) and SMSF Owners’ Alliance, to ensure any proposed changes to SMSF policy translate into level-headed fair regulation.
In a small victory for the advocating parties, Treasurer Scott Morrison recently advised that the Government will soften its policy on the back-dated $500,000 non-concessional contributions cap following concern expressed on the impact of this Budget measure on contracts that were on foot prior to the 3 May Budget.
The Treasurer advised that where an individual’s SMSF has entered into a contract for the purchase of an asset (e.g. a property) prior to 3 May and planned to make contributions to the SMSF to allow it to complete the purchase, this can be done under transitional arrangements without breaching the $500,000 cap. However, the additional contributions must be within the $180,000 annual limit for non-concessional contributions that existed prior to the 3 May budget.
In addition, transitional arrangements will apply to SMSFs with existing borrowings to ensure legal obligations they entered prior to 3 May can be met, but only until 31 January 2017.
The Treasurer’s letter outlining the relaxation of the policy can be found here.
This is just the tip of the iceberg. With mounting pressure from industry, back benchers and Coalition conservatives, we expect to see further review by the Federal Government of the proposed superannuation measures and anticipate any eventual legislative changes will look very different to those originally proposed. Watch this space.
We will of course continue to pursue, in collaboration with other industry bodies, additional concerns raised about the impact of the new $500,000 cap and a number of the other proposed budgetary changes.
Should you require any further clarification on the proposed changes to superannuation, or any other issue surrounding your SMSF, please feel free to contact us on (07) 3391 5055.
Disclaimer: This article contains general information only and is not intended to constitute financial product advice. Any information provided or conclusions made, whether express or implied, do not take into account the investment objectives, financial situation and particular needs of an investor. It should not be relied upon as a substitute for professional advice.