Downsizing, super amnesty top client concerns

One of the most frequent questions fielded by advisers in late 2020 related to the financial repercussions of selling the main residence as clients move to downsize for lifestyle or health reasons, according to BT.

“Clients who are looking to sell the family home are asking their advisers about what the impacts may be on their superannuation and age pension,” said Tim Howard, a technical consultant in BT’s technical services team.

“During the worst of the pandemic, it seems many retirees stayed put and delayed any decision to move. With the pandemic situation mostly under control in Australia, along with positive news about the development of viable vaccines, retirees have been feeling more confident and are putting their plans in motion.”

Clients are also concerned around exempting the proceeds of the sale of the home from the asset test and the impacts of the superannuation guarantee amnesty, with the catch-up payments resulting in some employees exceeding their concessional caps.

“Importantly, if a client receives an excess contribution notice this year, they need to respond within the time prescribed. If they know they are going to go over the cap, it’s best to make an application for an excess contributions determination ahead of time, and not wait for the notice,” Mr Howard said.

Also top of the list is treatment of foreign assets, pensions and income streams, with COVID-19 travel restrictions seeing many clients looking to sell their foreign assets and questioning how they will be assessed in regard to age pension eligibility.