With legislative changes only a few weeks away, advisers should be on top of boosting clients' super balances, according to a superannuation expert.
Perpetual Private head of strategic advice Colin Lewis told Financial Standard one of the most critical tasks is making last-minute after-tax contributions under the current rules as it could be the last opportunity to do so.
"After-tax contributions will reduce from $180,000 to $100,000 per annum and you'll only be able to make them if your total super is less than $1.6 million. You may be eligible to fast track up to $540,000 of contributions (even if your super balance is, or will be more than $1.6 million), if you act before 1 July 2017," Lewis said.
Before-tax contributions, which will reduce from $30-35,000 to $25,000 per annum should also be maximised, he added.
"Hopefully those people who are in a position to make additional contributions would have been well advised by now to have done it. But for those that haven't, and have the ability to contribute definitely should because they won't have the ability to do it going forward," Lewis said.
CGT relief is another critical element for clients who either need to commute back excess amounts of $1.6 million or have a transition to retirement pension of any balance.
Lewis said if clients are utilising CGT relief, certain things need to be done to access that relief.
"It comes down to, 'who does the work - the adviser or the accountant?'" he said.
"The adviser has the relationship with the client and needs to point this out to them. But the actual work in terms of going through line by line, cherry picking what assets to reset cost base for, we believe that's tax advice and that the accountant should be doing it."
Lewis warned the adviser should be aware of this and must have "that conversation with the clients and work with the accountant to make sure that it's done right.
If a super balance falls between $1.6 and $1.7 million, clients have six months to reduce it without penalty.
If this is not addressed by December 31, the balance still needs to be reduced - "you have to reduce the amount in excess plus the notional earnings component of that amount; and there'll be a tax penalty on those notional earnings of 15%."
It's not big dollars, Lewis said, but it is not something clients want to be faced with.