Changes to Super Caps.

As confirmed by the Federal Government, there will be increases in standard concessional (deductible) and non-concessional (after-tax) superannuation contribution caps from 1 July 2024.

In the 2025 financial year, the concessional contribution limit will increase from $27,500 to $30,000 per annum.

At the same time, the non-concessional contributions cap (which is four times the limit) will rise from $110,000 per annum to $120,000.

This will flow on to the three-year bring forward rule, which allows anyone under 75 years of age (subject to member balances) to make up to three years’ worth of after-tax contributions to their super in a single year.  Eligible taxpayers will be able to contribute $360,000 under bring forward provisions, on the understanding that they make no contributions for the following two years.

By the same token, Hall Browns recommends that people also consider whether they’re eligible for carry forward contributions.

The difference? Bringing forward is taking from future years, while carry forward is unused caps from prior years. If your balance is less than $500,000 then carry forward contributions can be a tax effective opportunity to make a larger payment to super, in one year.

Carry forward contributions allow taxpayers to use some or all of their previously unused concessional contributions cap on a rolling basis for a maximum five years. So, if you didn’t reach the full amount of your concessional contributions cap ($27,500 for 2022 to 2024 and $25,000 from 2017 to 2021) this could be the way to go.

Given that 2018-19 was the initial year that taxpayers were entitled to carry forward unused amounts, the 2024 financial year is the first time that those carry forward contributions will expire. 

If you would like to discuss superannuation strategy and look at what’s most tax effective for you, the Hall Browns team is happy to guide you through.

The information on this website and the links provided are for general information only and should not be taken as constituting professional advice from Hall Browns Accountants. You should consider seeking the appropriate legal, financial, or taxation advice to check how the website information relates to your unique circumstances.

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