More Budget news re Superannuation

Some further Budget announcements of note for dentists relate to the following superannuation benefits:

• Self-employed to receive 100% tax deduction and co-contributions
• Aged-based limits abolished

The self-employed are to be treated the same as employed people in that the $5000 +75% deduction rule is being removed. In addition, the co-contribution will be extended to post-tax contributions made by the self-employed.

Also, the Maximum Deductible Contribution (MDC) limits are to be abolished from 1 July 2007 and replaced with a new annual contribution limit of $50,000. There is to be a transitional period for those 50 and over who currently have an MDC of $100,587, but more details are still awaited on this. Those under 35 will enjoy a $35,000 increase in their MDC, and 35 to 49 year olds will have an approximately $10,000 increase.

The ability to make deductible superannuation contributions is to be extended to age 75 (up from age 70).

Thanks to Moneywise and Challenger for drawing these changes to attention.