Previously tax payers were able to make non-concessional contributions of $180,000 per year, with an option of using the 3 year bring forward rule allowing a tax payer to make non concessional contributions of $540,000 (3 lots of $180,000).   

This will most likely change with the introduction of the life time cap of $500,000 per the government’s recent budget announcement on 3 May 2016.

The life time cap will take into account all non-concessional contributions made on or after 1 July 2007.

If an individual has exceeded the cap prior to commencement date (being 7.30 pm (AEST) on 3 May 2016, they will have used up their lifetime cap but will not be required to take the excess out of their superannuation fund(s).

However, post 3 May 2016, an individual makes non-concessional contributions that exceed the cap, they must withdraw  the excess from their superannuation fund(s). Individuals who choose not to withdraw contributions will be subject to penalty tax.

If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com

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