The federal budget has taken aim at the wealthiest Australians by tightening the concessional taxation of superannuation, as well as placing a $1.6 million cap on balance transfers.
Treasurer Scott Morrison has announced that Australians with combined incomes and super contributions greater than $250,000 will pay 30 per cent tax on concessional contributions (up from 15 per cent).
The threshold for the 30 per cent concessional taxation has been lowered from the existing $300,000 level.
The annual superannuation concessional contributions cap has been lowered to $25,000, down from $30,000 for people aged below 50 and down from $35,000 for those aged over 50.
The government has also introduced a $500,000 lifetime cap for non-concessional contributions to superannuation.
“The lifetime cap will limit the extent to which the superannuation system can be used for tax minimisation and estate planning,” said the government.
The government has also announced a $1.6 million superannuation transfer balance cap, putting a limit on the amount of money retirees can move into the tax-free superannuation environment.
Finally, the government has announced a low-income superannuation tax offset to replace the low-income superannuation contribution when it expires on 30 June 2017.
“This will allow individuals with an adjusted taxable income of $37,000 or less to receive an effective refund of the tax paid on their concessional contributions, up to a cap of $500,” the government said.
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