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You can make two types of superannuation contributions.
Those contributions made by an employer or by a taxpayer individually that are or can be claimed as a tax deduction. These contributions are treated as income in the hands of the relevant superannuation fund and are taxed at a rate of 15%.
Those contributions made into superannuation that are not claimed as a tax deduction. These contributions are not treated as income of the superannuation fund and as such are not subject to any tax.
Each contribution type is subject to a contribution cap. This cap sets the limit on the amount of contributions that can be made in any financial year.
Non-concessional contributions can be contributed in addition to the concessional contribution amount.
The current contribution limits are:
|Concessional Amount Member Aged Under 50||Concessional Amount Member Aged Over 50||Concessional Amount Member Aged Over 60||Non-Concessional Amount Member Aged Less than 65|
|2013 / 13||$25,000||$25,000||$25,000||$150,000|
|2013 / 14||$25,000||$25,000||$35,000||$150,000|
|2014 / 15||$25,000||$35,000||$35,000||$150,000|
Once you reach the age of 75, you can no longer make contributions into superannuation. The only contributions allowed are Superannuation Guarantee contributions from your employer.
Any amounts contributed over these limits are subject to excess contributions tax at a rate of 31.5% for concessional contributions and 46.5% for non-concessional amounts.
Current legislation allows for a ‘bring forward’ provision with non-concessional contributions. These provisions allow any individual under the age of 65 to bring forward the two years of non-concessional contributions into a single year without penalty. This means that an individual can contribute non-concessional amounts up to $450,000 in the first year of a three year cycle.
If you take advantage of the full bring forward provision you will be unable to make additional non-concessional contributions in year two and year three of the cycle without attracting excess contributions tax of 46.5% on the excess.
Please contact Altitude Advisory for more information.
Luke Talbot-Male, Adventures Beyond
Phillip Cross, Royce Cross Agencies