Higher Concessional Caps
Each year you’re entitled to make super contributions. Superannuation contributions can be divid-ed into two types – concessional (before tax) and non-concessional (after tax). Concessional caps include employer contributions, even those made under salary sacrifice arrangements, and tax de-ductible input by an individual. If you have more than one fund, all of this type of before tax input made to your funds are cumulatively counted towards the cap.
From 1st of July 2014 Government has introduced the higher concessional and non-concessional contributions cap:
Too Much Superannuation Will Now Be Taxed at Your Marginal Tax Rate
If your concessional contribution exceeds the cap, the excess can be returned to you and will count towards your assessable income and be subject to your marginal tax rate plus an interest charge. There will be a tax offset equal to 15% of the excess amount applied, to compensate for the 15% contributions tax that will have already been paid by the fund. You could choose to keep the excess in your super but this will result in the excess being assessed against the non-concessional contribution limit.
Bring Forward Rules and Cap Increase
Non concessional superannuation contributions are more popularly known as after-tax contribu-tions. If you’re under the age of 65, you are able to utilise so-called “bring forward” rules which is three years worth of contributions caps made in one year.
Before 1st of July 2014 it used to be $450, 000. From 1st of July 2014 the three years averaging provision available is $540,000. However, one should be aware that if a member has utilised the bring forward $450,000 prior to 30 June 2014, they will be subject to the provisions and caps avail-able in the period in which the provision was triggered.
# contribution caps