The SMSF Association has warned SMSF members wanting to take advantage of the higher concessional and non-concessional contribution caps ending on 30 June 2017 that the money needs to be in their SMSF bank account before the end of the financial year.
“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,” said SMSF Association CEO John Maroney.
“This year it’s particularly important they move early with the lower contribution caps taking effect on 1 July 2017,” he said.
“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 the concessional contributions cap will be $25,000 – down from $30,000, or $35,000 for those aged 49 and over on 30 June 2016. The non-concessional contributions cap will decrease to $100,000, from $180,000.
Maroney said it’s also important for trustees to check if they are within their current contribution caps.
“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,” he said.
“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.”