Currently, the earnings on assets used to support a transition-to-retirement pension account are tax-free. Members who are over preservation age (but younger than 65) and have not retired may start a transition-to-retirement pension. This enables the member to draw a pension from their superannuation account while still working. This pension is designed to supplement the member’s income to enable them to “transition” into retirement. The earnings on this pension account are tax-free.
From 1 July 2017, the earnings on a transition-to-retirement pension account will no longer be tax-free. Existing capital assets that support a transition-to-retirement pension account will be eligible for capital gains tax relief. This will be addressed in a separate article.
Call us today on 56656469 if you would like to discuss how these changes may apply to you.
DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice. Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information. We recommend that our formal advice be sought before acting in any of the areas. The article is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our consent,
Jeanette has over 20 years experience as an accountant in public practice. She is a Chartered Accountant, registered tax agent and accredited SMSF Association advisor. When she is not helping business owners grow their empires, you will likely find her out running on the trails or lifting weights in her local CrossFit gym. Book in to see Jeanette today.