Non-Concessional Contributions
Non-concessional contributions are contributions made by or for a member in a year that are not included in the assessable income of the super fund. Generally, these are contributions that have not been claimed as a tax deduction by the person making the contribution i.e. they are contributions funded from after tax income or savings.
A non-concessional contribution cap of $150,000 will apply per person per year. For members under the age of 65 they will be able to bring forward up to 2 years worth of contributions, to allow a contribution of up to $450,000 in any one year. The non-concessional contribution cap will calculate as three times the ongoing concessional contribution cap (which is indexed). Amounts in excess of the concessional cap are also included in the non-concessional contribution cap. Contributions over and above the non-concessional contribution cap are taxed at 46.5%.
Concessional Contributions
Concessional contributions are contributions made by or for a member of a superannuation fund that are included in the assessable income of a superannuation fund. These are generally employer contributions and those personal contributions for which a member will claim a tax deduction.
A concessional contribution cap of $25,000 per person per year now applies to concessional contributions from 1 July 2009. This cap will be indexed.
A transitional period will also apply for members over age 50 between 2007/08 and 2011/12. Where a member turns 50 during this period they will have a concessional contribution cap of $50,000 for each year from the time they turn 50 until the end of the transitional period.
Contributions in excess of the concessional contribution cap will be taxed at an additional 31.5% over and above any tax levied on the contribution.
Claiming a Tax Deduction for a Personal Contribution
Within the eligible caps, certain members may be able to claim a full tax deduction for any personal contributions they make to superannuation. A member will be eligible to claim a tax deduction for a personal contribution where they:
- Are not considered to be an employee for the purposes of the superannuation guarantee ; and
- Are considered to be an employee for the purposes of the superannuation guarantee but derives less than 10% of their total assessable income and reportable fringe benefits from that employment.
CGT Cap Amount
Contributions made from certain amounts arising from the disposal of qualifying small business assets are exempt from a person’s non-concessional contribution cap, up to a life time limit of $1.1 million.
Contributions allowed under the cap include:
- Up to $500,000 of capital gains that are disregarded under the small business CGT retirement exemption; and
- The capital proceeds from the disposal of assets that qualify for the small business CGT 15-year exemption.
