Over 56? Then this affects you!

There is growing speculation that changes will be made to the tax treatment of Transition to Retirement Income Streams (TRIS’s) in this year’s Federal Budget which is to be announced early next month (3 May 2016).  These changes may see a reduction in the tax benefits which currently apply to these pensions and associated strategies. 

Our clients who are currently using a TRIS strategy pay minimal or no personal income tax.

Whatever changes are announced to TRIS’s, we believe it is unlikely those changes will apply to TRIS’s which were commenced prior to this year’s Federal Budget.  The Treasurer has previously stated that the Government will not be making changes to the superannuation tax concessions which adversely impact on those who are already in the pension phase.

If you are over age 56, and have not yet commenced a TRIS, it might be worth doing so before this year’s Federal Budget.  This should enable you to lock in the existing significant tax benefits associated with a TRIS if changes to the TRIS rules are indeed announced in the Federal Budget next month – but you must act quickly.

If no changes are announced to TRISs in this year’s Federal Budget, the adverse consequences of having commenced a TRIS in anticipation of changes are likely to be minor.

Kim Jay CA – Director