SMSF trustees looking to take advantage of the higher contribution caps for concessional and non-concessional contributions that end on 30 June 2017 need to ensure any additional money is in their SMSF bank account before the end of the financial year.
SMSF Association Chief Executive Officer John Maroney says: “Trustees sometimes leave it until the last minute to make either concessional or non-concessional contributions, only to discover they have left it too late and those contributions become part of the following financial year’s contribution cap.
“This year it’s particularly important they move early with the lower contribution caps taking effect on 1 July 2017. Remember, too, 30 June falls on a Friday, so don’t leave contributions till the end of the last week of June to make a deposit, because transactions can take up to two or three days to clear and your funds could become a 2017-18 financial year contribution.”
From 1 July 2017, concessional contributions will be reduced from $30,000 a year (or $35,000 for those who were aged 49 or over on 30 June 2016) to $25,000 a year for everyone. For after-tax super contributions, the cap will fall from $180,000 a year to $100,000 a year.
Maroney says it’s also important for trustees to check whether they are within their current caps, either for concessional or non-concessional contributions.
“It can happen that trustees can make a mistake with their contributions, so take the opportunity before 30 June to make sure you are inside the legal limits.
“Although excess contributions, either concessional or non-concessional, do not have the strong tax penalties that they used to have, going over the caps is still an unneeded compliance issue that is best avoided with the right planning.
“I would certainly urge anyone who has any questions in the wake of the extensive changes to superannuation following last year’s Budget and the subsequent legislation to speak to a SMSF specialist advisor,” he says.