The Major Parties’ Superannuation and Tax Policies
Posted on 04 April, 2019
The federal election has been called for
May 18 and both major parties have outlined their superannuation and tax
policies. With the federal election only weeks away many of our clients have
been asking what the major political parties’ policies are that may impact
their SMSF, individual taxation circumstances or personal investments.
If you would like more information on a particular
policy announcement, please do not hesitate to contact our office to set up a
time to discuss any requirements you may have.
Liberal-National
Coalition
Superannuation
- Australians aged 65 and 66 will be able to make
voluntary superannuation contributions without needing to work a minimum
amount. Previously, this was only available to individuals below 65.
- Extending access to the bring-forward
arrangements (the ability to make three years of post-tax contributions in a
single year) to individuals aged 65 and 66.
- Increasing the age limit for individuals to
receive spouse contributions from 69 to 74.
- Reducing red-tape for how SMSFs claim tax
deductions for earnings on assets supporting superannuation pensions.
- Delaying the implementation of SuperStream
(electronic rollovers for SMSFs and superannuation funds) until March 2021 to
allow for greater usability.
Taxation
- From 2018-19 taxpayers earning between $48,000
and $90,000 will receive $1,080 as a low and middle income tax offset.
Individuals earning below $37,000 will receive a base amount of $255 with the
offset increasing at a rate of 7.5 cents per dollar for those earning
$37,000-$48,000 to a maximum offset of $1,080.
- Stage 1 tax cuts: From July 1 2018, increasing
the top threshold of the 32.5 per cent tax bracket from $87,000 to $90,000.
- Stage 2 tax cuts: From 1 July 2022, increasing
the top threshold of the 19 per cent personal income tax bracket from $41,000,
to $45,000.
- Stage 3 tax cuts: From 1 July 2024, reducing the
32.5 per cent marginal tax rate to 30 per cent which applies from $120,000 to
$200,000. The 37 per cent tax bracket will be abolished.
Australian Labor Party
Superannuation
- Disallowing refunds of excess franking credits
from 1 July 2019 – this would mean SMSF members in pension phase no longer
receive refunds for the franking credits they receive for their Australian
share investments.
- Banning new limited recourse borrowing
arrangements.
- Reducing the post-tax contributions cap to
$75,000 per year down from $100,000.
- Ending the ability to make catch-up concessional
contributions for unused cap amounts in the previous five years.
- Ending the ability for individuals to make
personal superannuation tax deductible contributions unless less than 10 per
cent of their income is from salaries.
- Lowering the higher income 30per cent super
contribution tax threshold from $250,000 to $200,000.
Taxation
- Labor supports the stage 1 tax cuts and will match
the $1,080 low and middle income tax offset. From 1 July 2018, individuals earning
below $37,000, will get a $350 a year tax offset, with this amount increasing
for those earning between $37,000- $48,000 to the maximum $1,080 offset.
- Introduce a 30 per cent tax rate for
discretionary trust distributions to people over the age of 18.
- Will limit negative gearing to newly built
housing from January 1 2020. (Existing investments are grandfathered under the
current law)
- Reduce the capital gains tax discount for assets
that are held longer than 12 months from the current 50 per cent to 25 per
cent. (Existing investments are grandfathered under the current law)
- Limit the deductions for the cost of managing
tax affairs to $3,000.
How
can we help?
If you have any questions or would like further clarification in regards to how the above policies may affect you and your fund, please feel free to give me a call on 0414 583 558 to arrange a time to meet so that we can discuss your particular requirements in more detail . Alternatively, you can refer to the SMSF Association’s trustee education platform, SMSF Connect.