With the removal of the 31.5 per cent tax rate that previously applied to excess concessional contributions, the cap is potentially increased to above $35,000 for some SMSF trustees, Mr Burgess indicated.
“There hasn’t been a lot of focus on this particular point for some people because the excess is now added to their assessable income,” Mr Burgess said.
“It takes a while for some of these changes to be digested for everyone, including the industry,” Mr Burgess said.
However, Mr Burgess indicated there are still issues with non-concessional contributions, which remain heavily taxed.
“We’ve solved some of the problems around concessional contributions, but we’ve still got some issues with non-concessional contributions in terms of the severity of the tax. I think the industry [agrees] that the concessional cap is still too low,” he said.
The industry continues to push for contributions caps to be raised, with the Institute of Chartered Accountants' Liz Westover telling SMSF Adviser an urgent review of contributions caps by the Coalition is necessary.