07 Sep Matrix Norwest – June 2021 Bulletin
A message from our Partners
‘The secret of change is to focus all your energy not on fighting the old, but on building the new.'”
What an eventful first half of 2021 it has been with a handful of our team reaching the 15+ years employment milestone, welcoming new team members as well as navigating the transition of Rob’s retirement as an adviser. We are excited with the possibilities ahead for the rest of the year and we look forward to catching up.
For this bulletin, we have provided a summary of a number of the upcoming tax changes and included an update on the markets.
Matthew Stevenson, Rob Pedersen, Alison Stevenson and Lachlan Sue
Partners, Matrix Norwest
After 8 months of maternity leave, we would like to welcome Maria Lado back to the team. As many of you would know, Maria has been with Matrix Norwest for over 16 years and brings with her an unrivalled passion for client service.
We are incredibly excited to have her back in a role which will see her sit across all aspects of financial services within our business, from financial planning to tax and accounting. We have no doubt she will thrive with these new responsibilities and will continue to be an invaluable asset to servicing our clients.
As the 2021 financial year draws closer to its end, it is important to keep in mind the raft of changes that will come into effect from 1 July 2021 for individuals and businesses.
– Stage 2 of the government’s personal income tax plan continues to roll out and the government has extended the low to middle income earner tax offset for another year.
Corporate Tax Rule
– A significant change for businesses coming up on 1 July 2021 will be the change in corporate tax rate from 26% to 25% for base rate entities (broadly applying to small-medium sized trading companies).
Immediate Asset Write-Off
– The immediate asset write-off provisions were extended to 30 June 2023, allowing small to medium sized businesses immediately write off depreciable assets.
– The superannuation guarantee rate is increasing to 10% from 1 July 2021 and will continue to increase by 0.5% every year until the 2025 financial year where it will reach 12%.
Superannuation Cap Changes
– There are also several superannuation caps that are scheduled to be indexed from 1 July 2021.This means the following:
– The concessional contributions cap for the financial year will be $27,500
– The non-concessional contributions cap for the financial year will be $110,000
– The transfer balance cap will be indexed to $1.7 million for pension balances. (If you have already commenced a pension in one of your superannuation funds at any point, you will now have your own individual transfer balance cap)
– The total super balance cut off point for making non-concessional contributions will be $1.7 million.
– Finally, the government announced in a media release on 29 May 2021 that the minimum superannuation pension drawdown relief will be extended for another year, meaning pension minimums will remain effectively half of what the Superannuation legislation would otherwise require them to be until 30 June 2022.
To address these concerns, we need only look back historically to find a sense of comfort while we retain our steadfast investment principles. In the last 60 years the US S&P 500 valuation has increased by 70 times. Meanwhile, the US consumer price index rose only 9 times in the same period. This teaches us that the innovation of the world’s largest and most successful companies has always allowed them to find a way to deliver successful outcomes for shareholders. To this extent, as we have always done, the team at Matrix Norwest encourages you to stay disciplined as the markets traverse new heights, and to speak to your adviser if you have any concerns.