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Excess super contribution tax amendments passed
The Federal Government has passed legislation through Parliament to remove punitive tax rates on excess superannuation contributions, with the support of the opposition.
In a statement Assistant Treasurer Josh Frydenberg said that the Tax and Superannuation Laws Amendment (2014 Measures No.7) Bill 2014 makes sure unintentional breaches of the non-concessional contributions cap do not result in a "disproportionate" penalty.
"The new approach strikes a right balance between fairness to those who make mistakes and discouragement of those who embark on aggressive tax planning strategies," Frydenberg said.
The amendments also include improvements to capital gains tax rules, and involuntary super rollovers, and it will also move tax complaints investigation to the inspector-general of tax.
Individuals can now take out from super an amount equal to their super contributions in excess of non-concessional contributions cap and an additional 85 per cent of related earnings amount.
All earnings will be included in their assessable income and taxed at their marginal tax rate. Individuals will be eligible to a non-refundable tax-offset of 15 per cent of the earnings amount.
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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