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.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.