HLB Mann Judd partner of wealth management and superannuation Michael Hutton says once 1 July 2017 hits, super members with $1.6 million or more will not be able to make another non-concessional contribution.
“We’re actively talking to clients about this last chance opportunity they have if they do already have $1.6 million,” he said.
Mr Hutton expects the uptake of the bring-forward rules to contribute $540,000 into super this financial year will be similar to that in 2007 when super members had the chance to contribute $1 million.
“I think this $540,000 is going to be similar. I think people will scramble and save to get this money into superannuation,” he said.
While this is an opportunity advisers should discuss with clients, Mr Hutton warned against using strategies where the client borrows money in order to contribute the money to super.
“It would be very rare that we would recommend that. I think that borrowing is problematic partly because it’s not tax deductible, but partly because you’re then borrowing money which is pre-payable to put it into something that may not be accessible to you for a few years,” he said.
For some clients, there may be a range of ways where it is possible for them to contribute the money.
“Others might bring forward the sale of a holiday house to get the money in. Other people might have share portfolios that they can put into superannuation as an in-specie contribution,” Mr Hutton said.
“Other people might even just have the $540,000 just sitting around.”