The recent changes to superannuation rules have seen a
seismic shift in the way we approach SMSFs and retirement planning,
guests were told at a well-attended seminar in Brisbane on
Thursday, 1 December.
The seminar, which also ran as a webinar earlier in the day,
addressed the 2016 Budget's changes to superannuation rules and
how these affect people with money in SMSFs.
Scott Hay-Bartlem and Clinton Jackson, partners in Cooper Grace
Ward's commercial team, discussed the legislation and the
effects already being felt in the industry around SMSFs and
'What we are seeing is a fundamental change in the
superannuation system, and advisers must get on top of the new
rules and proactively review their clients' situations,' Mr
Advisers must ensure, among other things, the following:
prior to 30 June 2017, every client's pension balances fit
within their transfer balance cap;
they have identified all superannuation interests their clients
have and are aware of the person's 'total superannuation
before making superannuation contributions, that person's
'total superannuation balance' is less than the condition
for the relevant cap;
they know when clients on transition to retirement income
streams satisfy an unrestricted condition of release and the
pension documents immediately convert that into an account based
which clients benefit from the removal of the 10% test for
deducting personal contributions and the bring forward of unused
concessional contribution caps; and
the estate planning arrangements of all clients with funds in
SMSFs is reviewed to ensure they still achieve the desired outcome
under the new rules.
'One strategy that will come to the fore for clients with
younger children is the availability of child pensions, as the
treatment for transfer balance caps can be significantly
advantageous' said Mr Hay-Bartlem.
Mr Jackson said that advisers and clients should beware the
temptation to lock into reversionary pensions without considering
the benefit of maintaining the trustee's discretion in choosing
when an income stream is paid to a surviving spouse after
'While reversionary pensions are useful estate planning
tools, the new rules provide for a reversionary pension to count
toward the recipient's transfer balance cap 12 months after
death. If the pension is not reversionary, we can choose the start
date and therefore the date it counts toward the recipient's
cap,' Mr Jackson said.
The new rules will have wide-ranging effects on SMSFs and estate
planning, and it will be important for advisers to be familiar with
strategies to achieve the best outcomes for their clients under the
new regime. Cooper Grace Ward will be discussing these issues in
further detail at their SMSF Conference on 23 March 2017. This
year's event will also include an 'SMSF Back to Basics'
session, designed to provide a grounding on the rules that apply to
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Cooper Grace Ward is a leading Australian law firm based in
This publication is for information only and is not legal
advice. You should obtain advice that is specific to your
circumstances and not rely on this publication as legal advice. If
there are any issues you would like us to advise you on arising
from this publication, please contact Cooper Grace Ward
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