WEALTH INSIGHTS 26 th May 2016
What a Wonderful World Jonathan Pain
Beware the prism through which you view the world • Bad news sells newspapers • 7 billion people in the world • View from 1-Al8tude Bar Singapore • Ingenuity of humanity • Out of Africa
USA • S8ll the greatest na8on of innova8on? • The land of the free? • Some slowing in growth, but ok • Donald Trump -the new poli8cal reality • Ted Cruz- “Lucifer in the flesh”
Europe • Please don’t men8on Greece! • Lower oil prices • Truck sales • Super Mario does it again • Slow but steady recovery
China • AQer a stunning rise comes a crash • Government meddling disappoin8ng • 6% growth in 2016 and 5-6% in medium term • High levels of debt • South China Sea
India • India to grow faster than China • A ‘Modi-fied’ India! • Oil price decline a posi8ve • A second sleeping giant awakes
Rise of Asian middle classes • Chinese and Indian consumers will be spending nearly $10 trillion by 2020* • Indonesia, Vietnam, Bangladesh, Philippines • Most significant economic phenomenon of our life8me *Source: ‘The $10 Trillion Prize’ , Silverstein, Singhi, Liao, Michael, The Boston Consul8ng Group
Australia • The great rebalancing • A ‘sizzling’ 3% but weaker growth ahead • House prices set to decline • A na8on of real estate agents • Rising incomes in Asia: green and clean Australia=opportunity • More beach...
Challenges ahead • Too much debt • Emerging market debt...China • ‘Omnipotency’ of monetary policy?
What a Wonderful World • Na8onality, colour and gender are becoming irrelevant as we become ideologically more united and becer educated. • The digital age gives us a greater degree of transparency and connec8vity. • The decades ahead will see an era of prosperity, enlightenment and opportunity that very few are predic8ng.
This presenta8on has been prepared by JP Consul8ng (ACN 101 761 433) and is for general informa8on only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete descrip8on of the macers described. It does not contain and is not to be taken as containing any securi8es advice or securi8es recommenda8on. Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions. JP Consul8ng does not give any warranty as to the accuracy, reliability or completeness of informa8on which is contained in this presenta8on. Except insofar as liability under any statute cannot be excluded, JP Consul8ng and its directors, employees and consultants do not accept any liability for any error or omission in this presenta8on or for any resul8ng loss or damage suffered by the recipient or any other person. Unless otherwise noted, JP Consul8ng is the source of all charts.
Questions for Jonathan?
SUPERANNUATION The Past, Present and Future Anthony Flapper Head of Private Wealth
What we will cover Rules we are playing under Where to from here? Strategies for consideration
Current vs Proposed Issue Current Rules Proposed Measures Proposed Start Date Concessional 49 and Under $30,000 $25,000 limit 01/07/17 Contributions 50 and Over $35,000 irrespective of age Non $180,000 annually, Concessional $540,000 bring forward $500,000 Lifetime cap 03/05/16 Contributions rule Deductible contributions available Tax Deductions Self employed need to for Personal meet 10% test for up to age 74 01/07/17 Contributions deductible status irrespective of employment status Adjusted Taxable Adjusted Taxable Income over $300,000 Income over $250,000 Div 293 / High – 15% additional tax – 15% additional tax 01/07/17 Income Earners on concessional on concessional contributions contributions
Issue Current Rules Proposed Measures Proposed Start Date Transition to Tax Free earnings when 15% tax on earnings in Retirement member in pension 01/07/17 pension phase Pensions phase $1.6m Cap on Balances in excess of Super Transfers $1.6m will be taxed on Not applicable 01/07/17 into Retirement earnings at 15% inside Products fund 65-74y.o. currently Removal of work test need to meet work test so anyone up to age 74 Work Test 01/07/17 of 40hrs in 30 days can make personal paid employment contributions Accruing of unused Concessional Catch up Contributions Cap for a Concessional Not Applicable 01/07/17 period of 5yrs if fund Contributions balance below $500,000
Where to from here? Retirees (age 65+) Concessional Contributions – caps, deductions and carry forward Re-contributions Segregation of assets Spouse Balancing Family Trusts Insurance Bonds
Where to from here? Pre-Retirees (Age 55-65) Concessional Contributions – caps, carry forward Non-Concessional Contributions – since 01/07/07 Transition to Retirement – cease or start Spouse balancing CGT Retirement Exemption Family Trusts Insurance Bonds
Where to from here? Accumulators (under 55’s) Concessional Contributions – caps, deductions and carry forward Borrowing inside SMSF’s Spouse Balancing Family Trusts Insurance Bonds Start contributing earlier – the value of compounding
Opportunities Family Trusts – a resurgence! Ability to build assets in protected structure Use of lower marginal tax rates potentially – spouses, adult children, etc Continuance post death of generations of family members
Opportunities Insurance Bonds – an alternative Investment into Company Structure taxed at corporate rates Tax Free return on investment post 10 year holding period CGT Free internal switches between investment options CGT Free transfers of ownership between individuals Held outside the Will and not challengable by the estate
Opportunities $1.6m cap – segregation of assets Pension phase now – realising gains pre 1/7/17 if over/near $1.6m Using c/fwd Concessional Caps Excess funds drawn from pension vs. accumulation accounts
Disclaimer This presentation has been prepared by Matthews Steer Pty Ltd, an Authorised Representative of Premium Wealth Management (ABN 11 091 418 861; AFSL 237498) and is for general information only. The presentation has been prepared without taking into account your personal objectives, financial situation or needs. You should assess whether the information is appropriate for your needs and consider talking to a Premium Wealth Management Authorised Representative before making any investment decision. The relevant PDS should be considered before making a decision about any financial product. 26 th May 2016
THANK YOU Anthony Flapper Head of Private Wealth aflapper@matsteer.com.au| 03 9325 6300
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