At this time of year the changes to superannuation that began from July 1 are usually a good topic for discussion. However this year it’s the changes that didn’t happen that are most newsworthy.

The changes that did happen are worth noting. The limits on contributions have been indexed up. Concessional or tax-deductible contributions are now allowed up to $32,500 per annum instead of $30,000.

People planning their salary sacrifice arrangements for the year can adjust their voluntary contributions up so that, when added to their employer super guarantee contributions, the total will be close to but not over $32,500.

The limit for non-concessional or non-tax-deductible contributions is four times the concessional limit, so $130,000 per year now. The ‘bring-forward rule’ also allows two future years contributions to be made immediately to cover the three-year period.

So people who wish to build up their super with non-deductible lump sums from inheritances, asset sales or other sources can now put $390,000 in their accounts, up from $360,000. This limit can also be used in recontribution strategies to eliminate the super death benefit tax.  

However, the most important news is the changes that didn’t happen to superannuation. Capital gains tax is changing. In most cases the tax payable will be higher, but not in super.

Capital gains within super accounts will continue to be taxed at ten per cent. Capital gains in pension accounts will continue to be tax free.

Many other rules are changing to boost the Government’s tax take. That makes superannuation more appealing.

Negative gearing of existing residential properties has been banned. If the expenses including interest exceed the property’s rental income the deduction will no longer be allowed against other income such as salaries.

Family trusts are also directly in the Government’s firing line. New rules impose a minimum thirty per cent tax on trust distributions even if the beneficiary is paying no tax or is in the bottom bracket.

The fact that the only changes to the super rules allow more money to be put in makes it more attractive than ever compared to other investments. Income tax is fifteen per cent while accumulating and zero in pension mode.

Even for people who are over the limit of the amount they can convert to a tax-free pension it will be better to keep the extra amount in super accumulation mode, at least up to $3 million. People who are reluctant to put all their savings into super can retain more control by using a wrap account with a large investment menu or setting up a self-managed super fund.