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Non concessional contributions changes

13 May 2014  |  Super

2014 upwards

The end of the 2013-2014 financial year is fast approaching and there is likely to be a rush of investors looking to take full advantage of the non-concessional contribution limits before June 30th. There are penalties for exceeding the limits and so it is important to have all the facts.

The non-concessional contribution cap in the 2013-2014 tax year is $150,000 per year. From the 2014-2015 tax year, it will increase to $180,000 per year.

If you are under 65 years of age for at least one day of a financial year, you can also ‘bring-forward’ the next two years worth of contributions. This allows you to make a contribution equivalent to three years worth if contributions totalling $450,000, in one year. Once you do this, you are not able to make any more non-concessional contributions for a further two years.

If you are planning to take advantage of the ‘bring-forward’ option in the 2013-2014 year, you will not be able to benefit from the increase to the annual limit that comes into play in the 2014-2015 financial year.

The ‘bring forward’ option in the 2014-2015 tax year will allow investors to increase the amount of non-concessional contributions they can put into their super fund. From July 1st, 2014, investors will be able to contribute a maximum of $540,000 under the 'bring-forward' rule in one tax year.

Be aware, that there are also some other types of contributions that don’t count towards the non-concessional limit. They include proceeds from the sale of a small business asset, a personal injury settlements and some other special types of contributions, so it pays to check your circumstances before you proceed.

The laws on limits are often subject to change so it is wise to check or get advice BEFORE you make any contributions. 

Source Australian Tax Office website May 2014-05-13

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