Catch-up concessional super contribution strategies
Catch-up concessional contribution rules are a new opportunity, available this 2019/20 financial year, that can be used to maximise tax-effective contributions.
The new rule allows you to make larger super contributions to increase retirement savings, manage your tax position and may assist in equalising super interests between spouses.
Eligible individuals can accrue amounts of unused Super concessional contributions (CC), which can be carried forward to enable CCs to be made in excess of the annual cap in future years.
These contributions may assist by building your super interests when you’ve had breaks in employment or worked less in a previous financial year.
You may also be able to contribute an amount after receiving a recent pay rise, redundancy payment, inheritance or from the sale of an investment property or shares.
Unused amounts accrued from 1 July 2018 can be carried forward for up to five years and can be used in 2019/20 and future financial years when certain conditions are met.
Personal deductible and salary sacrificed contributions are eligible catch-up CCs.
Benefits of contributing carry forward amounts
The benefits of contributing carry forward amounts may include:
▪ building your superannuation savings for retirement;
▪ managing tax;
▪ offsetting capital gains on the sale of assets, eg investment properties or shares, or
▪ subsequently splitting an eligible amount to a spouse’s superannuation fund.
To make a catch-up CC, your total superannuation balance as at the previous 30 June, must be less than $500,000, in addition to being eligible to contribute to super.