Last night’s federal Budget contained a bunch of worthwhile measures that reduces the attractiveness of superannuation as a means of tax avoidance, namely:
- The $15% high income super surcharge will be lowered from $300,000 to $250,000.
- Introducing a $25,000 cap on super contributions for those aged under 50 and $35,000 for those aged over-50 (although this can be rolled-over for those with interupted work patterns).
- Capping tax-free superannuation accounts at $1.6 million, applying to both prospective and existing retirees. Additional balances over $1.6 billion will be taxed at a still concessional 15%.
- Introducing a lifetime cap of $500,000 on non-concessional superannuation contributions.
- Abandoning plans to remove the low income superannuation tax offset, which was introduced under Labor, thus ensuring that those earning less than $37,000 will not pay more tax on their super contributions than their earnings.
