South Africans living in Australia will be very interested to know that new superannuation rules will come into play on the 1st of July 2017. These rules affect all South Africans living in Australia who are looking to contribute excess funds, especially funds that have originated from their retirement savings in South Africa, to their Australian superannuation by means of non-concessional contributions.
The non-concessional cap is dropping
Non-concessional contributions are all contributions apart from the amount your employer contributes on a monthly basis. Up until the 30th of June 2017, you can make a non-concessional contribution of $180 000 per annum.
On the 1st of July 2017, this drops to $100 000, which means you won’t be able to put away as much into your superannuation as you can currently.
Will non-concessional contributions be closed to you?
Added to this new capped change, the new rules state that that from the new financial year, if the total balance of your super accumulation and income streams is over $1.6 million, you won’t be able to make any more non-concessional contributions. So if you are planning to make non-concessional contributions, now would be the time to do it!
Top up your superannuation by $540 000
You still have the opportunity, if you’re under 56 to bring forward three years’ worth of after-tax super contributions up to a maximum of $540 000. After the 1st of July 2017, this will be limited to $300 000.
Be careful not to pay extra tax
It’s important to note that if you contribute more than these caps, you may have to pay extra tax. Once your funds are invested in superannuation, you need to meet a condition of release like retirement in order to access your funds. The value of your superannuation can also fluctuate going up or down, so before you make any extra contributions, ensure you are comfortable with doing so and understand any associated risks.
Take advantage of the superannuation window today!
One of our top services is retirement annuity transfers by means of encashment. With this service, we assist South Africans living overseas turn their South African retirement annuity policies into cash and we then transfer the funds to their new home. The good news is that this can happen even before you turn 55 and the funds can be used for any purpose – whether you choose to top up your Australian superannuation or renovate your home!
With more than 60 000 clients in 105 countries, we’re widely recognised as South Africa’s leading financial migration brand and have assisted expats with retirement annuity transfers and many other migration services. In everything we do, we are proud to have a 100% success rate.
If you’re a South African residing in Australia or any other country and need advice about your financial migration, contact us today and we’ll help you on the path to financial freedom in your new home.
Article written by Mariette Janse van Rensburg
*This information is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, and other companies may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investments.
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