Time is running out for superannuants to ramp up their balances, as well as acquire new business premises via an SMSF, before the opportunity is gone for good, according to HLB Mann Judd.
“The changes coming into effect on 1 July this year will drastically reduce the amount that people can contribute into their super, so those who do have funds to put into their super should do so now or they may lose the opportunity entirely,” HLB Mann Judd Sydney director of superannuation Andrew Yee said.
From 1 July, the non-concessional contribution (NCC) cap is reducing to $100,000 a year, down from $180,000, or if brought forward over three years, $300,000, down from $540,000.
Furthermore, people with $1.6 million in super on or after 1 July will not be allowed to make any further NCCs.
“This creates a final opportunity to maximise and make NCCs to super,” Yee noted.
“In particular, small business owners who are considering transferring their business property into an SMSF or buying new business premises via an SMSF should consider taking action now.
“Doing so before 30 June means they can take full advantage of the current contribution caps, however, after 1 July the capacity for an SMSF to acquire a commercial property will be greatly reduced without having to resort to borrowing, which itself is under threat of being curtailed or even completely abolished.”
He said he believed the changes due to come into effect at the start of the next financial year are likely to have a significant impact on how people save for their retirement.
“In my view, this is a super contribution opportunity on par with that in the 2007 financial year when the government allowed everyone a one-off NCC limit of $1 million,” he said.
“It means those with smaller super balances have the chance to make a significant start on their retirement savings, which they may not have the opportunity to do again, and those with more than $1.6 million in super, it may mean their last chance to top up their super.”
Most of the attention has been on the $1.6 million total super balance cap, he noted.
“The fact that the $1.6 million cap has received so much attention may have lulled people into a false sense of security, allowing them to think that because they don’t have that kind of money, the super changes don’t affect them,” he said.
“But the reality is that anyone who has additional funds at the moment should take the time to understand the changes and take action in the next month before the opportunity is gone to make a significant difference to their super.”
