Tax Free Superannuation in Retirement

On 27th February 2007, the Minister for Revenue, Peter Dutton announced that the bills associated with the Simpler Super reforms have been passed by the Senate.

This means that the principal elements of the reforms announced in last years Budget now have the force of law.

From the 1st July 2007;

• Superannuation benefits paid from a taxed superannuation fund will be tax free when paid to people aged 60 and over. This includes benefits paid as either a lump sum or as a pension. Remember however, the preservation rules have not changed so a person must meet a condition of release in order to access their preserved superannuation benefits.
• The age based deduction limits applying to contributions will be replaced by streamlined contribution rules.
• Reasonable benefit limits will be abolished.
• Those people eligible to claim a tax deduction for personal contributions (e.g self-employed) will be able to claim a deduction of 100% of the contribution.
• The co-contribution scheme will be extended to the self-employed.
• New “simplified” pension drawdown rules will apply to pensions commencing on or after 1st July 2007.

Tel: 02 4421 2345Fax: 02 4421 2340