Carrying Forward your Concessional Contributions
Legislation introduced in the 2016 budget has now come into affect, that allows you to carry forward any of your unused concessional contributions cap (currently $25,000 per annum), on a rolling basis for 5 years.
This ability to carry forward your contributions commences this financial year, so the benefit of this strategy will start to show from the 1 July 2019. So how does this work? If you do not use your full $25,000 pre-tax contribution limit in this financial year, you can carry forward the unused amount to the next financial year. You can do this for up to 5 years, (on a rolling basis), and theoretically build up a pre-tax contributions cap of $125,000, (assuming you do not receive any SG contributions from employment.)
This strategy isn't going to benefit everybody and remember, 15% super contributions tax applies to pre-tax contribution. But if you are in a higher tax bracket, you may see the benefit of this strategy. For example: if you trigger a large capital gain in the future and want to offset the associated tax liability, you could utilise the carry forward strategy, by making a large tax deductible contribution to super.
So if you have an investment that you want to sell and you know it will potentially trigger a large capital gain, come and talk to us before proceeding with the sale. We can help you navigate this and other strategies, that may be of benefit for you and leave you a in a better position.
This document has been prepared by Rowland Financial Advisory Pty Ltd ABN 66 163 488 480 who is a Corporate Authorised Representative of Matix Planning Solutions Limited ABN 45 087 470 200, AFSL & ACL No .238256. Information in this document is based on regulatory requirements and laws, as at 1 July 2014, which may be subject to change. This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision. Taxation considerations are general and based on present taxation laws, rulings and their interpretation and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.