27 April 2012

Superannuation contributions and managing caps

With the superannuation contribution limits being so low and the penalty tax payable for exceeding them so high, you should review your contributions now to ensure you manage the caps this financial year.

Concessional Contributions
The limit for Employer contributions (including contributions made under a salary sacrifice arrangement) and Personal Contributions claimed as a tax deduction by a self-employed person is $25,000 for the 2011/12 financial year.

If you are 50 years old or over, the annual cap is currently $50,000. This increased cap was to cease in June 2012 but there have been some changes announced to leave the cap at $50,000 for fund balances under $500,000 however they are yet to become law.

The cap amounts are calculated when the money is received by the superannuation fund. If your June superannuation is not paid to the Fund until July then it will be included in the cap for the following year. If you are therefore close to the cap limit, it is important to check with the Fund what payments have been allocated to you for this financial year.

Non-Concessional Contributions
You may also contribute Non-Concessional contributions – these are personal contributions for which you do not claim an income tax deduction. The 2011/12 limit is $150,000. People under 65 years of age however may be able to bring forward their
non-concessional contributions up to three times their non-concessional cap over a three-year period bringing it to $450,000.

Please contact us for more information about superannuation contributions.

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This Newsletter, of necessity, has dealt with matters of a technical nature in general terms only. Clients should contact us for detailed information on any of the items in the Newsletter. No responsibility for loss occasioned to any person acting or refraining from acting in reliance upon any material in this Newsletter can be accepted by any member or employee of the firm.

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