26/11/2013

At the beginning of November, the Treasurer Joe Hockey addressed the uncertainty surrounding numerous proposed tax and superannuation policies dating back to 2001.  
 
Mr Hockey's announcement specifically addressed particular changes announced on the 5th of April this year by the previous Labor Government concerning superannuation earnings.

Of the 92 proposed taxation policies addressed by Mr Hockey:

•    18 will be put into effect
•    3 will be amended before being enacted
•    7 will be abandoned
•    64 will the subject of consultation to determine if these will be kept.

What's In for Super

Increased concessional contribution caps – from 1 July 2013 taxpayers aged 60 and over will have a $35,000 cap on their concessional contributions.  From 1 July 2014 those aged 50 and over will also be able to make concessional contributions up to $35,000 per year.
 
Excess Contributions Tax regime – the new regime will apply to taxpayers who have exceeded their concessional contribution cap after 1 July 2013 and allow access to new measures permitting the excess contribution amount to be withdrawn and taxed at that person's marginal rate.

What's Out for Super

Taxation of pension earnings above $100,000 – importantly, the announcement confirmed that the proposed tax due to take effect from 1 July 2014 on pension earnings over $100,000 would no longer proceed.

Low Income Superannuation Contribution – the proposed policy was intended to provided Government superannuation contributions of up to $500 per year for those earning $37,000 or less but will no longer take effect.  

Other changes

Mr Hockey also confirmed that the Government will not proceed with both the proposed $2,000 cap on self-education expenses and $1.8 billion fringe benefits tax on the car industry.

The remaining 64 outstanding policies will undergo a review prior to the Government confirming whether or not it will enact these measures.  However, it appears from initial comments that it is unlikely that these measures will remain.

If you have any questions in relation to this article, please contact Townsends Business & Corporate Lawyers on (02) 8296 6222.