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