Changes to Australian Superannuation & How It Affects Expats

Changes to Australian Superannuation & How It Affects Expats
Expat Super

 

05/03/2014 – The Australian Taxation Office (ATO) has released its thresholds for superannuation for the 2014/15 financial year.

Important changes that may affect Australian expats will commence from 1 July 2014 and include:

The concessional cap will increase to $30,000 ($35,000 for those aged 49 or more on 30 June 2014).
• The non-concessional contributions cap will increase to $180,000 (annually) and $540,000 over 3 years (under the ‘bring forward’ rules).
• The low rate cap (for tax on super lump sum withdrawals under age 60) will increase to $185,000.

Expats intending to maximise non-concessional contributions to super can consider the strategy of making $150,000 contributions in 2013/14 and $540,000 of contributions after 1 July 2014.  However care should be taken to ensure that the $150,000 cap in this financial year is not accidentally exceeded, triggering the ‘bring forward’ provisions too early.

Increases to the concessional contributions cap and the non-concessional contributions cap from 1 July 2014 are a welcome development.  Expats can consider increasing salary sacrifice arrangements for 2014/15 to take advantage of the newly indexed $30,000 concessional contributions cap ($35,000 for those now aged 49 and above).  Also consequential increases to the non- concessional contributions cap means clients can put more into super.

Brett Evans is the Managing Director and a Financial Planner with Atlas Wealth Management which is the first financial services firm in Australia to specialise in providing financial advice to Australian expatriates. With over 20 years of experience in the finance and investments industry, Brett has worked for blue chip companies which include the Australian Stock Exchange (ASX), HSBC, Suncorp and Citi Smith Barney.

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