The concessional contributions cap has been increased for everyone aged under 50 from $25,000 to $30,000 from 1 July 2014. The increase was included in an update on the Australian Taxation Office website late last month.
It’s the first time the concessional cap has risen in five years.
Concessional caps for people aged over 49 have also risen to the same as those aged 59 or over i.e. $35,000.
The cap on non-concessional contributions (i.e. those contributions made from after-tax income) has risen from $150,000 to $180,000.
That means that the bring forward rule on non-concessional contributions – that allows you to role three years of non-concessional contributions into one year – makes the three-year cap $540,000 instead of $450,000.
There is still the possibility that the caps could be frozen at the May budget.
The ATO has also released information around how the excess concessional contribution charge (ECC) is calculated if you make contributions that exceed the caps. Information on both the increase in caps and ECC can be found on the ATO’s website here.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
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- Gary Stone –Â Is the Rio phoenix rising?
- Paul Rickard –Â Gold and mid-caps lead the market higher
- Penny Pryor –Â Shortlisted
- Geoff Wilson –Â The greatest reality show on earth – the stock market!
- Rudi Filapek-Vandyck –Â Buy, sell, hold – what the brokers say
- Penny Pryor –Â A long weekend for the property market
