Non-concessional contributions are after-tax contributions made to your super, or better known as personal contributions for which you do not claim an income tax deduction, they also include spouse contributions. Non-concessional contributions can be a good way to maximise your super and help you save for retirement.
As of 1 July 2017, the legislation surrounding non-concessional contributions changed. The new legislation saw a change in contribution caps; the maximum amount of money you can personally contribute to your super. The contribution cap was lowered from $180,000 to $100,000 per year. If you currently have more than one super fund the total amount contributed to all your super funds added together count toward the non-concessional contribution cap of $100,000.
The non-concessional contribution cap is still set at four times the concessional (before tax) contributions cap, which is $25,000 for the 2017-18 financial year. The non-concessional contribution cap will increase in $10,000 increments in line with the indexation of the concessional (before tax) contribution cap.
The new, lower non-concessional contribution caps operate under similar rules that were in place for the 2016-17 contribution cap of $180,000.
However, effective 1 July 2017 if your super balance is greater then or equal to $1.6 million at the end of June 30 of the previous financial year, you will not be able to make further non-concessional contributions as these would be considered excess contributions. Excess contributions are taxed at a higher rate.
LifeTime Financial Group are specialist (holding appropriate accreditations) advisors who are ideally positioned to assist you.
Would you like to discuss your personal position further with one of our highly qualified financial planners? Why not call us today on 03 9596-7733. There is no cost or obligation for our initial conversation/meeting.
Written by Anthony Stedman of LifeTime Financial Group. A leading privately owned Melbourne based Financial Planning practice.