SMSFs urged to maximise NCCs ahead of federal election
With Labor threatening to lower non-concessional contributions caps should they win the next election, practitioners should encourage clients to maximise their cap this financial year, says a technical expert.
Speaking at a seminar, DBA special counsel Bryce Figot said reminded practitioners that one of the policy proposals by Labor is to reduce the non-concessional caps down to $75,000 per annum.
"So non-concessional contribution caps could become even more modest. Once upon a time, if you weren't making a deduction, effectively it was an unlimited amount that you could put into super. From 2007, it went down to $150,000, then jumped up again to the $180,000, now of course it's at $100,000 and it might go down even lower, to $75,000," said Mr Figot.
"The strategic implication of this is that if you have a client who wants to put money in super, then perhaps put it in sooner rather than later."
Mr Figot pointed out that tossing in the entire $300,000 allowed under the bring-forward rule may not actually be the best approach to making the most of the caps.
"If you want to max out the non-concessional caps then you want to contribute $100,000 now and then wait until the new financial year and put in another $300,000."
Mr Figot said while this may seem obvious to a lot of SMSF practitioners, advisers often do make this mistake.