The Bring-forward measures and 6-member SMSF bill passes Parliament
In June 2021, the measures to extend the bring-forward age up to 67 and the bill to increase the number of members allowed in an SMSF were passed by both houses of Parliament. Both measures have been items of discussion for an extended period of time, and we are excited to have a definite outcome at last.
The Bring Forward Measure
The changes to the Bring Forward Measure amends the Income Tax Assessment Act 1997 to enable individuals aged 65 and 66 to make up to three years of non-concessional (after tax) superannuation contributions under the bring-forward rule. Previously, this measure was only available to members under the age of 65. This change is inline with another recent change to the work test (the age at which the work test starts to apply for voluntary superannuation contributions has been increased from age 65 to age 67).
A member’s non-concessional contribution cap is dependent on a number of factors, including their Total Superannuation Balance (TSB) at 30th June the prior year, so please contact us to discuss your circumstances before contributing additional money to superannuation under this measure.
Increase in Number of SMSF Members from Four to Six
This proposal follows a recommendation by the Super System Review (Cooper Review) back in 2010. Many SMSFs currently have just one or two members, so this change may not affect them. However, for larger families with existing SMSFs, this new measure has the potential to provide greater flexibility for joint management of retirement savings. We anticipate that this change may bring about the following benefits for some clients:
- Making a larger pool of funds available to either diversify the existing investment mix, or purchase investments such as property that may not have been previously viable due to borrowing restrictions or lack of capital;
- Improve liquidity of the SMSF to help support older members who have already entered pension phase meet their minimum pension requirements without having to sell down existing investments;
*Both of these amendments received Assent 22nd June 2021 and will apply from 1st July 2021*.
Of course, any decisions that are made will need to be done so after careful consideration of the provisions of your SMSF trust deed and personal circumstances. If you would like to discuss this further, please contact David Darrant, Paul Lewty or Christine Benson on 07 5437 9900.