Unlimited tax-effective super has ended: Centuria

24 November 2016

Publication: Money Management
Sydney, 24 November 2016

Unlimited tax-effective super has ended: Centuria

Australians will increasingly turn to investment bonds, amid the government legislating new super concessional contribution limits, according to property and investment bond manager, Centuria.

Centuria’s investment bonds general manager, Neil Rogan said additional contributions to super may not be an investor’s best option when planning for retirement, as the Government finalised super legislation reforms that would be effective from 1 July 20 17.

“Those savers likely to exceed the $1.6 million

superannuation balance cap should review their options and consider alternatives to help supplement their superannuation,” he said.

“For Australians who will be affected by the new rules next year, and for those who want to contribute more than the maximum tax-effective contribution, investment bonds can be a very robust option worthy of consideration.”

Since the superannuation reforms were first proposed in the 2016 Federal Budget, Rogan said Centuria had received increased levels of enquiries from investors wanting information on bonds.

Now that the reforms were confirmed, he expected bond enquires to continue.

He said bonds were are a simple, flexible way for investors to supplement their super.

There was no limit on the investment amount, and investors could access their funds at any time. However, after 10 years there was no personal tax to pay on withdrawals, he said.

“Another advantage is that bonds allow for additional contributions of up to 125 per cent of the previous year’s contribution each year,” he said.