The new super laws are the biggest changes to super since 2007. Given that most of the measures commence on 1 July 2017, there are a number of planning matters to consider prior (and after) that date. These include:

Transfer balance cap – transitional measures

Considering the transitional CGT relief measure for a cost base reset
Reviewing each fund asset to determine whether to elect to have their cost base reset by the time the super fund lodges its tax return for the 2016/17 year
Considering whether to sell assets prior to 30 June 2017
For units in private unit trusts and shares in private companies – whether to restructure prior to 30 June 2017 or elect the cost base reset
For super funds using the proportionate method – whether to pay tax relating to the accumulation interest in 2016/17 tax return or to defer the tax until asset is sold
For super funds with market linked pensions – considering how the new laws affect such pensions and the fund

Transfer balance cap – from 1 July

Whether to have a separate fund for pension accounts and accumulation accounts
Making sure only minimum pension payments are paid from pension accounts – additional funds should be taken from accumulation accounts or as lump sums out of the pension accounts

Transfer balance cap – death benefits

Review current death benefit planning and how the new laws affect those plans
Consider incorporating reversionary pension nominations into pension documentation
Consider planning for a liquidity event on the death of the first of a couple
Consider the application of the child caps and whether death benefits should be paid to minor or disabled children

Transition to retirement income steams

Consider whether they can be converted into account based pensions – including whether members aged less than 65 have met a full condition of release
Whether such pensions should cease at 30 June 2017
The application of the transitional CGT relief measure to such pensions

Changes to the non-concessional contributions caps

For members aged less than 65, using the bring forward rule to make a non-concessional contribution of up to $540K prior to 1 July 2017
For a member aged between 65 and 75, making a non-concessional contribution of up to $180K (subject to satisfying the work test) prior to 1 July 2017
For members with account balances over $1.6 million, their last chance to make non-concessional contributions potentially ends on 30 June 2017
Whether such contributions can be made by transferring business real property into the super fund

To discuss this article, or for further information please contact:

Phil Broderick
Principal
Sladen Legal
T +61 3 9611 0163 l M +61 419 512 801
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: pbroderick@sladen.com.au

Melissa Colaluca
Associate
Sladen Legal
T +61 3 9611 0161
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: mcolaluca@sladen.com.au