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Find out what your peers are asking – based on real-life questions submitted to TechConnect.
By Scott Quinn – Senior Technical Services Manager
Q: Last financial year (FY2019/20) my client Arvi, made a non-concessional contribution (NCC) of $220,000 triggering the 3 year non-concessional bring forward rule. Next financial year (FY2021/22) he wishes to use the remainder of his non-concessional contributions cap. He has not made any additional non-concessional contributions since. Does he get the benefit of the indexed non-concessional contributions cap from 1 July 2021?
A: When you trigger the bring forward rule you lock in either a 2 or 3 year NCC cap based on the annual cap available at that time. In the FY2019/20 the annual NCC cap was $100,000.
Q: Last financial year (FY2019/20) my client Arvi, made an NCC of $220,000 triggering the 3 year non-concessional bring forward rule. He has not made any additional NCCs since. Next financial year (FY2021/22) he wishes to use the remainder of his NCC cap. Does he get the benefit of the indexed NCC cap from 1 July 2021?
Despite the indexation of the NCC cap to $110,000 at 1 July 2021, Arvi cannot take advantage of the indexed cap. In FY2021/22, Arvi can contribute up to $80,000 ($300,000 - $220,000) providing his total super balance at 30 June 2021 is less than $1.7m (previously $1.6m).
The following table outlines the interaction between total super balance and the NCC bring forward rules:
* Also applies to the 2019/20 financial year, the year the bring forward was triggered within this Q and A.
# Subject to age eligibility. Currently less than age 65 at the start of the relevant financial year. It was proposed to increase to less than age 67 at the start of the financial year effective 1 July 2020, however this proposed change has not been legislated at the time of writing this Q and A.
If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.
DisclaimerThe information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.