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Budget 2015: Contributing to super - what you need to know

May 2015


Topping up your superannuation just got a little less dangerous with new rules that allow excess non-concessional contributions to be refunded.  

Topping up your superannuation just got a little less dangerous with new rules that allow excess non-concessional contributions to be refunded.  

A huge number of Australians have been penalised by excess concessional contributions tax, because they contributed over the allowable level of contributions, with tax bills often disproportionate to the relatively small over contribution. 

And, there was very little you could do about it, even if the contribution was not deliberate.

The new rules mean that members can have the excess contributions refunded to them PLUS 85% of the associated earnings on those amounts. 
 
The full earnings will then be included in your assessable income and taxed at your marginal tax rate.  You will then be entitled to a non-refundable tax offset equal to 15% of the associated earnings.  Simple right?  Maybe not but it's a lot easier to understand than a $70,000 tax bill for going even $1 above your contributions limit.

These new rules apply to excess non-concessional contributions made from the 2013/14 financial year onwards.  So, if you were affected by excess contributions tax, something can be done about it.

Also this month:

Budget 2015: Who is in the firing line?

Budget 2015: What's in it for families and individuals?

Budget 2015: What's in it for business? 

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Disclaimer

This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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