What is a concessional contributions cap?
A concessional contributions cap applies to payments you make into your superannuation fund over a financial year.
It is a cap set by the Government which also has the power to change it slightly from year to year.
There are two types of “caps” – concessional and non-concessional.
A concessional contribution includes all employer contributions (including salary sacrifice contributions) and any personal superannuation contributions claimed as a tax deduction.
A non-concessional contribution is made from after-tax income.
If you are under age 49 at 30 June 2015, the concessional contribution cap is $30,000 (inclusive of any compulsory employer contribution)
If you are aged 49 or more at 30 June 2015, the concessional contribution cap is $35,000 (inclusive of compulsory employer contributions)
The non-concessional cap, while operating on the same premise of putting more money into your superannuation, is set much higher at $180,000 for the current financial year, although depending on your circumstances the cap may be as high as $540,000
However, this too has some age limits and it is worth seeking expert advice from your Financial Planner.
With the end of financial year looming, now might be a good time to move some money into your superannuation fund if you are still sitting below the cap for the 2015/16 year.
Superannuation – what do I need to know before the financial year ends?
The main thing to know now is whether you can still put money into your superannuation fund before June 30.
As you will see above, there are some “caps” on how much you can invest so do your sums and discuss your situation with your Financial Planner to see if you are still eligible to make a concessional or non-concessional contribution prior to 30 June 2016.
Anything that lowers the tax you pay is a good idea and putting some money into your partner’s superannuation can work really well.
Not only would this lower your taxable income, as you may be able to claim an 18% tax deduction on super contributions of up to $3,000 you make on behalf of your spouse, where he or she earns less than $13,800 per annum.
Your Financial Planner is in the best position to explain this strategy as it does have a couple of prerequisites centered around how much annual income your partner makes, whether they earn money at all and how much you can contribute to their super.
The basic rule of thumb is this: the amount of tax you pay depends on how much you put in to super and when you did it.
Have you paid before or after tax time? How old are you? Did you stay under/go over the concessional limits?
These questions may not be simple to answer so contact your Financial Planner who can help you quickly and promptly.
To make an appointment to see one of our Financial Planners call us on 13 25 85 or book an appointment online.
This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with the assistance of a Financial Planner, whether the information is appropriate in light of your particular circumstances and needs.
Financial planning services are provided by Eastwoods Wealth Management Pty Ltd ABN 17 008 167 002 / AFSL 237853 trading as Beyond Bank Australia Wealth Management. Eastwoods Wealth Management Pty Ltd is a subsidiary of Community CPS Australia Ltd ABN 15 087 651 143 / AFSL 237 856 trading as Beyond Bank Australia.
Any general tax information provided is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.