Five Year Catch-Up Concessional Contributions

A provision to allow individuals to utilise their unused concessional contribution cap space over a five year period is now in effect. This provision was originally included in the 2017 Superannuation Reforms legislation and is now able to be utilised.

For individuals who have a Total Superannuation Balance (TSB) of less than $500,000 at 30 June, the provision applies to contributions made from 1 July 2018 and allows unused concessional contribution cap space to be carried forward for a five year period.

This allows for an individual to potentially make up to $125,000 of concessional contributions in one financial year which may be deductible in their own name. This is a great opportunity to be able to boost superannuation balances of adult children or for individuals expecting a large income year due to CGT etc.

As an example, an individual returning from a gap year who did not make concessional contributions in the 2019FY can make up to a $50,000 contribution for the 2020FY ($25,000 for 2020FY and $25,000 rolled forward from 2019FY unused cap space) and claim a personal tax deduction for part or all of this contribution (remember, employer contributions also count towards the $25,000 cap).

If you wish to discuss your eligibility or potential strategies that can be utilised using this provision, please contact your Oxygen Private Clients or Lumiere Private Advisory client Manager.

DISCLAIMER: The information contained in or referred to in this Blog Post is general in nature, subject to change, and should not be taken as advice for your individual or your group's circumstances. It is for information only and does not take into account any person or group's specific circumstances, objectives, financial situation or requirements. It does not constitute taxation, legal or financial advice. Oxygen Private Clients and Lumiere Private Advisory recommend you seek specific professional advice before making any decision or taking any action.