The announcement of the removal of the tax exemption for fund earnings derived from assets supporting a transition-to-retirement pensions (TRIP) shocked many sections of the financial services industry and certainly caught out many older workers currently using TRIPs.
Effective since 1 July 2017, the parliament removed the tax-exempt status of super fund earnings supporting a transition-to-retirement pension (TRIP). Until 30 June 2017, the investment earnings on super assets financing a TRIP were exempt from tax.
The removal of the tax exemption affects pre-existing recipients of TRIPs and future recipients of TRIPs. This measure will raise $650 million over 4 years. For more information on TRIPs and the changes, see the following SuperGuide articles:
- Less tax, more super? A transition-to-retirement pension is no longer the answer
- TRIPs: 10 interesting facts about transition-to-retirement pensions
- July 2017 super changes: ATO Guidance Notes and Law Companion Guidelines
- CGT relief and the $1.6 million transfer balance cap, and TRIPs
- Super pensions: Reviewing the merits of keeping a TRIP
- Transition-to-retirement pension (case studies): How does a TRIP work?
Taking effect from 1 July 2017, the government has removed the tax-exempt status of earnings supporting a transition-to-retirement pension (TRIP). For more information see SuperGuide article Less tax, more super? A transition-to-retirement pension is no longer the answer.