For many years now Australians have been allowed to place non-Concessional Contributions into superannuation with minimal restrictions. This all changed on the 3rd May 2016, when the Government announced changes to the level of annual concessional contributions and changes to the life-time limit on non- concessional levels.
The extra tax, applicable when you breach these limits, can be a nasty surprise. Processes to rectify any errors can be problematic and costly from a compliance point of view.
For the 2016/17 year the annual limit for contributions from untaxed income, or concessional contributions, is:
- $30,000 if you’re under 50 of age
- $35,000 if you are older than 50 years of age.
From the 1st July 2017, it is proposed that these limits will decrease to $25,000.
For taxpayers who are currently salary sacrificing amounts to superannuation it is important that you discuss with your pay office the new limits and work together to ensure no breaches of the limit occur.
For individuals with Superannuation balances of less than $500,000 it is proposed that unused concessional caps amounts (for up to 5 years) can be carried forward for use in later years.
For non-concessional contributions it is proposed that a lifetime cap of $500,000 (indexed) will be placed on all members’ non concessional contributions placed into super. When assessing if this cap has been breached or not you will need to review your non-concessional contributions amounts made since 1st July 2007.
Given the change in limits we can see how easily clients can make a mistake. Poole Group have the team to guide you through this maze so before contributing to superannuation take the time to give us a call and clarify your position. Better to be safe than sorry.
P.S. If you are a SMSF trustee and not currently a client of Poole Group and are concerned about costs with your current service provider take advantage of our compliance cost guarantee. Call for a no obligation discussion 07 54379900