The Bring Forward Rule for Non-concessional Contributions

Strict limits apply to the amount of contributions which can be made for a super investor during a financial year.

For 2009/10 financial year the current dollar limits are $25,000 for concessional contributions and $150,000 for ordinary non-concessional contributions.  These are the general limits.  (There are other types of contributions which have their own limits – these other types of contributions are discussed below).

Concessional contributions are broadly contributions in respect of which a tax deduction is or can be claimed.  Non-concessional contributions are in general terms contributions in respect of which no tax deduction is or can be claimed.  Naturally, being tax and super, there are exceptions to these broad statements.

The significance of these contributions limits is that if they are exceeded, a tax liability will be incurred and payable by the super investor or paid from their super fund account balance. 

The tax liability for excess concessional contributions is 31.5% (remember the fund already has incurred a 15% tax liability on the excess concessional contributions).  The tax liability for excess non-concessional contributions is 46.5%.  Further, excess concessional contributions will also be counted as a non-concessional contribution.  So the same contribution may bear tax twice.  The tax liability is not intended to raise revenue but to enforce the strict compliance with the contribution limits.