Q. My wife is 53 and in 2012/13 has made a Concessional ($25,000) and Non concessional ($320,000) contribution to her SMSF Superannuation Fund. With the “Bring Forward Rule” $170,000 will be her Non concessional Contribution in 2013/14 of $150,000. There will be still $20,000 left over that. Still ok, as Bring Forward Rule allows for $450,000 contribution for the following 3 years.
Our question is : From 2012/13 the brought Forward amount into 2013/14 is $170,000. Can she use $150,000 as Non concessional Contribution and $20,000 as Concessional Contribution in 2013/14?
A. Provided you are under age 65, an individual is entitled to contribute up to $450,000 as a Non-concessional (after tax) contribution to Superannuation every 3 years. If you intend to claim a tax deduction for a contribution to Superannuation, you must notify the trustee of the Superannuation in the new financial year how much you intend to claim before you lodge your tax return for the previous tax year. This declaration is referred to as a “notice of intent”. A notice of intent must be submitted so that the Trustee can withhold the appropriate amount of contributions tax at 15% to the contribution you intend to claim a tax deduction for.
The “Bring Forward Rule” only applies to Non-Concessional Contributions, you cannot make a Concessional contribution in one tax year and split the deductible contribution over the two financial years, thereby accessing a higher Concessional Contribution Cap.
The one exception to this is if you a have an SMSF. Subsection 292-25(2) of the ITAA 1997 provides that a contribution may be split over 2 financial years provided the contribution is allocated within 28 days of the contribution being made. Practically this would mean the contribution would need to have been made in June 2013. Provided the Trust deed permits, the trustee can apply a portion of these funds to an unallocated contribution account and then allocate the funds to the members account within 28 days. So $25,000 could be applied for the 2012/13 tax year and $20,000 for the 2013/2014 tax year.
Please speak to your accountant or SMSF advisor to see if this opportunity applies in your case. For further information refer to ATO ID 2012/16.