In an online update of rates and thresholds for superannuation, the ATO stated that the CGT cap amount will increase from $1,480,000 cap up to $1,515,000 for the 2019–20 financial year.
The CGT cap allows individuals to make a personal super contribution using capital proceeds from the sale of certain small business assets and is separate to the non-concessional cap.
The concessional and non-concessional contribution caps, on the other hand, will remain the same for the 2019–20 financial year at $25,000 and $100,000, respectively.
Thomson Reuters senior tax writer Stuart Jones said that the concessional contributions cap is only indexed in $2,500 increments, so the AWOTE indexation factor of 1.023 for 2019–20 was insufficient to trigger an increase to $27,500.
“At this current rate of wages growth, the concessional cap is not expected to increase to $27,500 until 2023,” Mr Jones said.
Mr Jones said that while the super guarantee is frozen at 9.5 per cent until 1 July 2021, the maximum contribution base will rise to $55,270 per quarter from 2019–20, up from $54,030 for 2018–19.
“An employer is not required to provide the minimum super guarantee support for that part of an employee’s ordinary time earnings (OTE) above the quarterly maximum contribution base,” he explained.
“This quarterly maximum represents a per annum equivalent of $221,080 for 2019–20.”
The government co-contribution “lower income threshold” is set to increase to $38,564 for 2019-20, while the “higher income threshold” is $53,564.
The low rate threshold amount for superannuation lump sum payments will also jump to $210,000 for 2019–20, up from $205,000 this financial year, while the untaxed plan cap will increase to $1.515 million.
“The tax-free amount for a genuine redundancy will increase to $10,638 as a base amount for 2019–20 plus $5,320 for each whole year of service,” Mr Jones said.
The general transfer balance cap is set to remain at $1.6 million for 2019–20.
“This also means that the defined benefit income cap of $100,000 p.a. is unchanged for 2019–20. Likewise, the total superannuation balance threshold of $1.6 million is unchanged for 2019–20,” he said.
