The ATO last week announced changes to the capital gains tax (CGT) cap amount, the lower and higher income thresholds for co-contributions and the maximum super contributions base for superannuation guarantee payments.
DBA Lawyers director Daniel Butler told SMSF Adviser it was important practitioners, particularly those advising business owners, are aware that the maximum super contribution base, used to determine an individual employee’s earning base for each quarter in the financial year, has increased.
The maximum super contributions base has risen from $50,810 in the 2015-16 financial year, up to $51,620 for the 2016-17 financial year.
The increase in the cap means that employers will have to pay an extra 9.5 per cent SG on the difference between the two caps where there is a salary arrangement.
Where there is an income package, this may mean the employer will adjust the proportions of superannuation, income, and fringe benefits to bring it in line with the new cap.
“The employee’s salary can be adjusted downwards, and the SG upwards,” said Mr Butler.
The CGT cap amount was also increased from $1,395,000 in the 2015-16 financial year to $1,415,000 for 2016-17.
“The 1,415,000 CGT cap applies where you get a CGT exempt amount, and you get an exempt amount where you sell an active business,” said Mr Butler.
SMSF trustees can opt under division 1.52 B of the Income Assessment Act 1997, he said, to have the sale proceeds, up to the cap amount, put into superannuation.
The ATO also increased the lower threshold amount for co-contributions from $35,454 this financial year to $36,021 for the 2016-17 financial year. The upper threshold also increased, rising from $50,454 to $51,021.