A positive this year is the reform of excess contributions tax that is currently before Parliament.
If passed, the amendments will enable individuals the option of withdrawing contributions in excess of the non concessional contributions cap and 85% of the earnings.
If you choose this option, no excess contributions tax will be payable and any related earnings will be taxed at your marginal tax rate. That's quite a difference to the current system that can apply a tax of up to 93%.
And, the changes apply retrospectively to excess contributions from the 2013/2014 financial year.
For those with SMSFs, make sure your fund is acting within the rules. There is too much money tied up in SMSFs for the Tax Commissioner to take a gentle approach to non-compliance.
Key issues include borrowings, unlawful interactions with related parties, overseas members and maintaining the residency of your fund, and ensuring that where pensions are being paid, they meet the maximum and minimum requirements. Plus, if your SMSF auditor has flagged issues with you, you must act to correct these.
There is talk of changes to the way superannuation is taxed and how and what funds can invest in, but there is no point reacting to these recommendations until there is more certainty about reform.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.