New non-concessional contribution limits

The super changes first announced in this year’s Budget were passed by the Senate on Wednesday. With that we now have a much lower new non-concessional contribution limit; that being the after tax contributions one can make into their super fund which are not taxed when received by a super fund – that is those monies that go into a super fund tax free and which come out tax free.

The current limit is $180,000 per annum but that will fall to $100,000 from July 2017. And with the concessional limit then also falling to $25,000, many people will have to re-calculate how they are going to accumulate sufficient capital upon which they can retire.

The bring forward rule will remain. That rule allows those under 65 to make three year’s worth of non-concessional contributions in one year whether that be from an inheritance, windfall or proceeds from an asset sale.  In the future, this means that no more than $300,000 can be contributed in any one year.  The limit to 30^th June 2017 remains at $540,000 but is subject to what has already been described by some as an unusual and complicated transitional rule.  Whilst the limit may remain at $540,000 for this financial year, it will be less for those who under contributed in 2015/16 or do so in 2016/17.  Make sure you understand what your limit is before making any non-concessional contributions before 30^th June 2017.

At MRS, we will spend today planning for your success tomorrow.

At MRS, we will spend today planning for your success.