| |
|
Superannuation contributions can be divided into two types —concessional (before-tax) and non-concessional (after-tax). Each type of super contribution is subject to a contributions cap. The contributions cap sets a limit on the amount of contributions you can make in any one year. If you exceed the cap, your excess contributions will be subject to additional tax.
|
| |
| What is a Concessional Contribution (‘CC’) |
|
A concessional contribution is generally any contribution made to a superannuation fund that is included in the assessable income of the fund, and includes all contributions made by an employer, and personal contributions made by a member for which they intend to claim as a tax deduction.
|
| |
| Tax treatment of concessional contributions |
|
Concessional contributions are taxed in the fund at the rate of 15%. However, when concessional contributions that exceed the applicable contribution caps (as below) are subject to an additional 31.5% tax on top of the 15% contributions tax.
|
| |
| Caps on concessional contributions |
| |
|
AGE
|
CONTRIBUTION CAP
|
|
2011
|
2012
|
|
Age less than 50
|
$25,000
|
$25,000
|
|
Age 50 or more
|
$50,000
|
$50,000
|
|
| |
|
It is important to note, this contribution limit is a ‘per person’ limit and includes contributions made to all superannuation funds, from all sources (including salary sacrificed contributions).
|
| |
|
|
A non-concessional contribution (formerly known as an undeducted contribution) is generally any contribution made to a superannuation fund that is not included in the assessable income of the fund, and includes personal contributions made by a member for which they are not intending to claim a tax deduction and spouse contributions.
|
| |
| Tax treatment of non-concessional contributions |
|
Non-concessional contributions are not subject to the 15% contributions tax. However, contributions which exceed the non-concessional contributions caps (as below) are subject to excess contributions tax at a rate of 46.5%.
|
|
| Caps on non-concessional contributions |
| |
|
AGE
|
CONTRIBUTION CAP
|
|
Less than 65 during
financial year
|
Annual limit – $150,000
Three year limit - $450,000
|
|
Between 65 and 74 for full financial year
|
Annual limit – $150,000
|
|
| |
|
Making a non-concessional contribution that is more than the annual cap is known as a ‘bring forward’. The maximum bring forward for the 2011 year is $450,000. When you contribute more than $150,000 in non-concessional contributions in one year, you automatically trigger the bring-forward rules for the following two years.
|
| |
| |
|
We welcome your feedback on our E-Newsletters, drop us a line if you would like something added next time.
Liability limited by a scheme approved under Professional Standards Legislation.
Contact Us | Disclaimer
|
