Year End Superannuation Contributions
By way of the exception proving the rule, the Government maintained their promise not to legislate further changes to the taxation of the superannuation industry. There are however, still some movements in the area of superannuation that you should remember especially when looking to contribute before 30 June this year.
The table below is a summary of the contributions caps occur for the current year and for those going forward from 1 July 2014. Importantly, for 2013-14, the concessional cap for individuals who are 59 years or over on 30 June 2013 is $35,000*. For 2014-15, the concessional cap for individuals who are 49 years or over on 30 June 2014 is $35,000. This means that an extra $10,000 can be put in per year on a concessional basis for those over 49 from next year. So if you have that extra $10,000 and were going to make a non concessional contribution, you might want to wait and make a concessional contribution.
For those that are considering making sizeable non concessional contributions and using the bring forward provisions a more carefully considered approach is required due to the change in caps effective from 1 July 2014.
The bring forward provision essentially enables a taxpayer to use 3 years worth of non concessional contributions in a single year, however, put simply the total contribution is calculated by reference to the existing year’s cap. So the maximum in the 2013/2014 year is $450,000, however, the maximum for the 2014/15 is $540,000.
What this means is that for individuals who have time on their side, but wish to make a concessional contribution, then they may wish to consider deferring this until after 1 July when they can put in an additional $90,000.
For those that have already put in $450,000 before the threshold changes were announced please remember that you cannot top up the contributions. In short, your cap remains at $450,000 even though it might appear to be $510,000 (ie 1x $150k and 2x $180k).
When determining how much you can put into superannuation, there are a number of criteria that need to be applied and considered. Accordingly, please contact your relevant ESV engagement partner on 9283 1666 before undertaking any action.
Article by David Prichard