In December there were changes to how super excess concessional contributions are taxed. Just like with most things, there are caps on the amount you can contribute to your superannuation fund each financial year that are taxed at lower rates. When you contribute more than the designated cap, you have to pay extra tax. Your cap and how much extra tax you pay is dependent on your age and whether your contributions are concessional or non-concessional. However, the general concessional contributions cap for 2013-14 is $25,000. This figure increases to $35,000 once you are 59 years or over on 30 June 2013 or 49 years or older on 30 June 2014.
Concessional contributions are contributions from before-tax income or for which a tax deduction has been claimed. This includes; compulsory employer contributions, salary sacrifice contributions and contributions for which a tax deduction has been claimed.
Excess super concessional contributions made from 1 July, 2013 will be included in an individual’s assessable income and taxed at their marginal tax rate. As part of the assessment process, clients will receive a non-refundable tax offset of 15% of their excess concessional contributions along with an additional excess concessional contribution charge.
Also, to assist with the payment of additional tax and charge, individuals can request up to 85% of their excess concessional contributions to be released from their super fund; this means it is not counted as non-concessional contributions (contributions from after-tax income).
Concessional contributions of $10,000 or less may receive a once only offer to refund their excess concessional contributions; however, this only applies to the 2011-12 and 2012-13 financial years only. If refunded, the amount is still assessed at their marginal tax rate rather than pay excess contributions tax.
For more information on concessional contributions or if you would like our assistance, please don’t hesitate to get in touch with the team here at Fortis Accounting Partners. You can reach out to us on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
