Do you have close to or more than $1.6m in superannuation? If so, this could be your last chance to make significant Non-Concessional contributions to your superannuation before the new rules take effect from 1 July 2017.
From 1 July 2017, the Non-concessional contribution cap will be dropped from $180,000 to $100,000 per year.
However, if you have more than $1.6m on 30 June 2017, you will not be eligible to make any further non-concessional contributions to super while your balance remains above $1.6m.
This could be the last chance to make a non-concessional contribution of up to $540,000 (under the “bring forward rule”, for those under age 65 and depending on whether you have already triggered the “bring forward rule” in the previous 2 years).
If you have between $1.4m and $1.6m there are modifications to the “bring forward rule” after 1 July 2017.
Alan is 58 has a superannuation balance of $1.5m. He has not previously triggered the bring-forward cap in the last two years. He is able to contribute $540,000 before 30 June 2017 ($180,000 x 3). He decides to contribute $200,000 in May 2017. After 1 July 2017, as his superannuation balance is now over $1.6m, he is unable to make any further non-concessional contributions.
Barbara is 64. She has a superannuation balance of $500,000, and has not previously triggered the bring-forward cap in the last two years. She is able to contribute $540,000 before 30 June 2017 ($180,000 x 3). She contributes $200,000 in June 2017. Her bring forward cap for the next 3 years is $380,000 (being $180,000 for 2017 + $100,000 for 2018 + $100,000 for 2019). Barbara is able to contribute a further $180,000 until 30 June 2019, at which time her cap will reset to $100,000 per year conditional on her passing the work test.
Please feel free to contact us if you have any questions regarding the above.