Unused concessional cap carry forward

Potentially top up super 2020 concessional contributions with any unused gap from the 2019 year.

From 1 July 2018, if you have a total superannuation balance of less than $500,000 on 30 June of the previous financial year, you may be entitled to contribute more than the general concessional contributions cap and make additional concessional contributions for any unused amounts.

The first year you will be entitled to carry forward unused amounts is the 2018-19 financial year. Unused amounts are available for a maximum of five years, and after this period will expire.

Table: Unused concessional cap carry forward

Note: This table assumes no indexing of general cap.

To be eligible, your super balance has to be less than $500,000 as at 30 June 2019 to do this and then for each subsequent year.

Essentially, if you made less than the maximum $25,000 concessional contribution in the 2019 year you can contribute extra in 2020 (in addition to the cap of $25k for the 2020 year) to bring this amount up.

So you are able to contribute a total of $50k for the 2019 and 2020 years combined, so long as you didn’t exceed the $25k in 2019. You can carry forward unused contributions for 5 years – so if you don’t use up the gap from the 2019 by the end of 2024 it’s lost.

This strategy is subject to the normal eligibility to make contributions requirements so check with Omnis Group’s SMSF Solutions Manager, Peta Berry, to determine if this strategy is suitable for you by calling 08 9380 3555.

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