So How Much Can I Contribute to my SMSF Using the Bring Forward Rule


3 Year Bring Forward Rule

3 Year Bring Forward Rule

So the government have announced the revised changes to the budget as outlined in my earlier blog Opportunities after Government back-flip on the superannuation reforms announced in the 2016 Budget. Now to explore in more detail the actual workings of the new Non-Concessional contributions rules and the “Bring Forward Rule” which allows larger lump sums to be contributed by bringing forward 2 future years of the non-concessional contribution cap to the current year.

For 2016-17 the single year capped contribution amount is $180,000 and then from 1 July 2017 it reduces to $100,000. So this year you can still use the bring forward rule to contribute the full $540,000 before June 30th 2017 and that has been confirmed by treasury. However if you do not have enough to meet that full contribution limit you can still trigger your cap by contributing at least $180,001 before the end of the year. Note that you may also have already triggered that rule in one of the 2 previous financials years and be wondering how much of the cap you have remaining. Well this table will clarify that for you.

bring-forward-caps

 

In summary the Limit to Bring Forward Contributions  based on year triggered are:

bring-forward-caps-summary

So for example;

If an SMSF member triggered the Non Concessional Cap bring forward rule this financial year with a $300,000 non-concessional contribution and could not make another NCC contribution before 30 June 2017, they could only contribute $80,000 as a non-concessional contribution in the 2017/18 financial year.

$1.6 million eligibility threshold and how it affects the 3 bring forward rule for contributions made after 1 July 2017

From 1 July 2017 another rule also applies that affects NCC contributions. Individuals are unable to make further NCCs where their total superannuation balance is $1.6 million or more (tested at 30 June of previous financial year). Where an individual’s balance is close to $1.6 million, they can only make a contribution or use the bring forward to take their balance to $1.6 million but not beyond.

Superannuation Balance Contribution and bring forward available
Less than $1,300,000 3 years $300,000
$1,300,000 – $1,400.000 3 years $300,000
$1,400,000 – $1,500.000 2 years $200,000
$1,500,000 – $1,600.000 1 years $100,000
$1,600,000+ NIL

What should you do now

If you are considering making a contribution this year then I strongly recommend that you track your previous 2 years contributions using the above tables  to assess how much you have contributed and how much you can now still contribute under the new rules.

I hope this guidance has been helpful and please take the time to comment. Feedback always appreciated. Please reblog, retweet, like on Facebook etc to make sure we get the news out there. As always please contact me if you want to look at your own options. We have offices in Castle Hill and Windsor but can meet clients anywhere in Sydney or via Skype. Just click the Schedule Now button up on the left to find the appointment options.

Liam Shorte B.Bus SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

SMSF Specialist Adviser 

 Follow SMSFCoach on Twitter Liam Shorte on Linkedin NextGen Wealth on Facebook   

Verante Financial Planning

Tel: 02 98941844, Mobile: 0413 936 299

PO Box 6002 BHBC, Baulkham Hills NSW 2153

5/15 Terminus St. Castle Hill NSW 2154

Corporate Authorised Representative of Magnitude Group Pty Ltd ABN 54 086 266 202, AFSL 221557

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.

 

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2 Comments

  1. How does the Budget 2016 affect contributions to an SMSF | The SMSF Coach
  2. Updated Guide to Tax Benefits of Using an SMSF Re-Contribution Strategy | The SMSF Coach

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