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.