Review contribution types and amounts to ensure your contributions (both concessional and non-concessional) have been optimised. The contributions caps for 2023-24 are as follows…
Non-Concessional Contributions:
$110,000 (unchanged from 2022-23), provided your total superannuation balance (TSB) was less than $1.9 million as at 30 June 2023. From 1 July 2024 the NCC cap will increase from $110,000 to $120,000.
Please note that access to the non-concessional contribution (NCC) bring-forward rule also depends on your TSB as at 30 June 2023 (see below)…
Note: If the bring-forward cap is triggered, but not used in full in the 2023-24 year, the remaining cap can only be used in the 2024-25 year where the TSB is less than $1.9 million at 30 June 2024.
Concessional Contributions:
$27,500 (unchanged from 2022-23) unless the individual carries forward their unused concessional contribution (CC) cap.
The carry-forward CC cap is applied if:
actual CCs are greater than the annual CC cap
TSB is less than $500,000 at 30 June of prior financial year (ie 30 June 2023 for contributions made in the 2023-24 year), and
they have unused CC cap available from any or all of prior 5 financial years.
Small Business CGT Concession Cap:
$1,705,000 (lifetime limit).
Important…
Check whether you have any unused CC cap amounts you can use in the current year - in many cases, it will make senset to use these amounts, but not always. For example, if you’ve had an unusual boost in your assessable income (for example due to a net capital gain) you may benefit from using their carry-forward CC cap to take advantage of tax concessions. However, if your additional CCs will be subject to Division 293 tax* (due to the income boost) when this wouldn’t ordinarily be the case, then you may be better off waiting until the following income year. Of course, other factors need to be considered too, including whether your TSB will likely remain within the $500,000 threshold to be eligible to make use of the carry-forward cap.
Also note that unused CC cap amounts can be carried forward for a maximum of 5 years. For example, the last year the unused CC cap from 2018-19 can be used will be the 2023-24 year.*Division 293 tax is an extra 15% tax on the super contributions of high income earners. this tax is charges if your income plus your concessional super contributions are above $250,000. there are different tax rules for members of defined benefit schemes.
Check the timing of your contributions…
Check your super fund’s cut off dates to ensure contributions are received in the intended year.
Contributions received by a super fund after 30 June 2024 will generally count towards the contributions cap in the 2024-25 financial year, even if they relate to 2023-24. This may impact on your contributions caps for next financial year.
For Superannuation Guarantee (SG) contributions, employers have until 29 July 2024 (ordinarily 28 July, which falls on a weekend this year) to make contributions for the quarter ending 30 June 2024.
A non-concessional contribution can only be accepted up until the 28th day after an individual turns 75.
Check the contributions made into all of your super funds to ensure the relevant caps have not been exceeded.
Check the classification of the contributions. Contributions not made by the member themselves (excluding spouse contributions and non-employer contributions made for a child) are generally treated as concessional contributions and count towards the concessional contributions cap. However, contributions made by an employer from the take-home (after-tax) pay of the client are considered by the ATO to be non-concessional contributions.
Rick Maggi, Financial Advisor, CFP
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Disclaimer: This information is general in nature and therefore should not be construed as ‘personal advice’ as your personal circumstances have not been taken into account by Westmount Financial or Rick Maggi. Please liaise with your existing Financial Advisor, or contact Westmount Financial before taking any action.