TRIS changes tipped to trigger migration to retirement
Changes to the taxation of transition to retirement income streams could see a significant number of SMSF trustees making the move from part-retirement to full retirement, according to one SMSF heavyweight.
SuperConcepts executive manager of SMSF technical and private wealth Graeme Colley says many retirees over 60 years of age, who currently have part-time or casual jobs, are deciding to move into full retirement as a result of the legislative changes to TRIS.
“The transition to retirement pensions they’re in receipt of at the moment will, after the 30th of June, still be transition to retirement pensions, but the income earned on those investments by the fund then become taxable,” Mr Colley said.
“Those retirees are now thinking, ‘Well, how do I retire so that those pensions then become account-based pensions and the income earned by the super fund, if it falls over the $1.6 million cap, will then be tax free in the fund?’”
Mr Colley has seen a number of SMSF clients decide to cease part-time or casual employment.
“It’s simply so they can get access to account-based pensions and receive access to tax-free income from the fund,” he said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.