Concessional contributions
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Concessional contributions (CC) cap
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Inclusions
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- Employer contributions (including salary sacrifice)
- Personal deductible contributions
- Allocations from a reserve unless an exemption applies
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Exemptions
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- Reserve allocations which are:
- fair and reasonable, made to all members of the fund or a relevant class of members, and less than 5% of member’s interest at allocation time, or
- from a reserve solely for the purpose of enabling the fund to discharge pension liabilities in certain circumstances, and
- Amounts transferred from an overseas pension scheme and taxable in the fund
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Cap – 2019/20
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$25,000
Indexed annually with AWOTE and rounded down to the nearest $2,500.
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Treatment of excess
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- All excess CCs will be taxed at the individual’s marginal tax rate less 15% offset
- Interest charge payable on increased tax liability resulting from inclusion of excess CCs in assessable income, calculated from start of financial year
- Individual has option to withdraw excess amount from super net of 15% fund tax
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Carry-forward unused CC cap
Starting from 1 July 2018, individuals will be able to carry forward their unused CC cap for up to 5 financial years for use in a future financial year.
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Carry-forward unused CC cap
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Requirements
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From 2019/20, individual’s CC cap increased if:
- actual CCs are greater than standard CC cap
- total superannuation balance is less than $500,000 at 30 June of prior financial year, and
- they have unused CC cap available from any or all of prior 5 financial years (occurring from 2018/19 onwards)
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Unused CC cap for a financial year
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The amount by which the standard CC cap exceeds an individual’s actual CCs in the financial year
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Non-concessional contributions
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Non-concessional contributions (NCC) cap
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Inclusions
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- Personal contributions not claimed as a tax deduction
- Spouse contributions
- Contributions for a child (apart from employer contributions)
- Amounts transferred from an overseas pension scheme that are not taxable in the fund, and
- Excess CCs (grossed up to include the 15% fund tax), excluding those which are withdrawn
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Exemptions
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- Government contributions
- Downsizer contributions within limits
- CGT small business concession contributions within limit
- Personal injury contributions
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Cap – 2019/20
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- $100,000 (indexed to 4 x CC cap), or
- If total superannuation balance as at 30 June 2019 is $1.6 million or more, NCC cap is nil
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Bring forward arrangement
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- Members under age 656 at any time in a financial year may bring forward future annual NCC cap entitlements, based on their total superannuation balance (see page 91) as at 30 June of the prior financial year. Where member’s total superannuation balance is:
- less than $1.4 million, total NCCs in 3 year period are capped at $300,000
- $1.4 million to less than $1.5 million, total NCCs in 2 year period are capped at $200,000
- $1.5 million to less than $1.6 million, bring forward is not available and total NCCs are limited to $100,000
- Bring forward applies from 1 July of first financial year where NCCs exceed $100,000
- Total superannuation balance must also be less than $1.6 million at prior 30 June, otherwise remaining NCC cap is nil for that year and NCCs will be excessive
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Treatment of excess
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- Individual has option to withdraw excess amounts plus 85% of associated earnings from super. Total amount of associated earnings taxed at marginal rates, less 15% offset
- Excess amounts not withdrawn from super taxed at 46.5% in 2013/14 and 49% in 2014/15, 2015/16 and 2016/17 and 47% in 2017/18 and 2018/19
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Downsizer contributions
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Downsizer contributions
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Requirements
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- Contribution limited to capital proceeds from disposal of a property located in Australia
- Contract for sale must be entered into on or after 1 July 2018
- Individual or their spouse must:
- have owned the property for at least 10 years
- be eligible for a full or partial main residence CGT exemption
- Individual must be aged 65 or more at time of contribution
- Contribution must be made within 90 days of change of ownership (ie generally settlement)
- Choice must be made using the ATO form no later than time contribution is made
- Individual must not have previously made a downsizer contribution from the sale of another property
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Cap – 2019/20
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$300,000 lifetime limit
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Treatment of excess
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Excess counts towards NCC cap
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CGT small business concession contributions
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CGT small business concession contributions
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Requirements
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- Contributions where individual owned CGT asset:
- contribution limited to capital proceeds of asset sale that meet CGT small business 15 year exemption (or would have if a capital gain had arisen)
- contribution limited to capital gain that meets CGT small business retirement exemption
- contributions must be made by later of date of lodgement of tax return or 30 days from receipt of capital proceeds
- Contributions where company or trust owned CGT asset:
- contribution limited to payment to CGT concession stakeholder
- contribution must be made within 30 days of payment to CGT concession stakeholder
- Choice made using ATO form no later than time contribution made
- Additional conditions apply
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Cap – 2019/20
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$1,515,000 lifetime limit
Indexed annually with AWOTE and rounded down to the nearest $5,000
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Treatment of excess
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Excess counts towards NCC cap
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Personal injury contributions
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Personal injury contributions
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Requirements
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- Contributions arising from:
- personal injury settlement relating to workers’ compensation
- personal injury compensation, or
- damages claim or right under statute in writing (court order or otherwise)
- Contributions must be made within 90 days of the later of receipt of payment or date of effect of settlement/order
- 2 medical practitioners must certify person is unlikely to ever be gainfully employed in a capacity where reasonably qualified by education, experience or training
- Choice must be made using ATO form no later than time contribution made
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Cap
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No cap applies
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