Private ruling: Non-concessional contributions - bring forward provisions
Published: January 2012
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Will the 'bring forward' provision under subsection 295-85(4) of the Income Tax Assessment Act 1997 be triggered where a contribution in excess of the non-concessional cap is made in the 2011-12 income year? Advice/Answers Answer: Yes


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 292-80. | Income Tax Assessment Act 1997 Subsection 292-85(2). | Income Tax Assessment Act 1997 Subsection 292-85(3). | Income Tax Assessment Act 1997 Paragraph 292-85(3)(a). | Income Tax Assessment Act 1997 Paragraph 292-85(3)(b). | Income Tax Assessment Act 1997 Paragraph 292-85(3)(c). | Income Tax Assessment Act 1997 Subsection 292-85(4). | Superannuation Industry (Supervision) Act 1993 | Superannuation Industry (Supervision) Regulations 1994

Reasons for decision: Detailed Reasoning - Summary of decision: In the 2011-12 income year you are under 65 years of age, have not already triggered the bring forward provision and intend to make non-concessional contributions in excess of $150,000 and up to $450,000. Therefore, you are able to trigger the bring-forward provisions by contributing an amount in excess of $150,000 and up to $450,000 in the 2011-12 income year. | Detailed Reasoning - Non-concessional contributions cap: Non-concessional contributions made to a complying superannuation fund will be subject to an annual cap (subsection 292-85(2) of the Income Tax Assessment Act 1997 (ITAA 1997)). For a person who is 50 years of age or more their non-concessional contributions cap for the 2011-12 income year is $150,000. Non-concessional contributions include: o personal contributions for which an income tax deduction is not claimed; o contributions a person's spouse makes to their superannuation fund account; and o transfers from foreign superannuation funds (excluding amounts included in the fund's assessable income). Some contributions are specifically excluded from being non-concessional contributions. These include: o a Government co-contribution; o a contribution arising from a structured settlement or an order for personal injury; o a contribution relating to some capital gains tax (CGT) small business concessions to the extent that it does not exceed the CGT cap amount ($1,000,000 indexed annually) when it is made; and o a roll-over superannuation benefit. A taxpayer will be taxed on non-concessional contributions over the cap at the rate of 46.5% (section 292-80 of the ITAA 1997). As a concession, to accommodate larger contributions, taxpayers under age 65 in an income year are able to bring forward future entitlements to two years worth of non-concessional contributions. | Detailed Reasoning - The Bring Forward Provisions: For a person who is 50 years of age or more their transitional concessional contribution cap for the 2011-12 income year is $50,000, and their non-concessional contributions cap is $150,000. However, subsections 292-85(3) and (4) of the ITAA 1997 ('the bring-forward provisions') provide that the non-concessional contributions cap is calculated differently if certain conditions are satisfied. Subsection 292-85(3) of the ITAA 1997 states: However, subsection (4) applies instead of subsection (2) in determining your non-concessional contributions cap for a financial year (the first year ) if: · your non-concessional contributions for the first year exceed the amount mentioned in subsection (2) for that year; and · you are under 65 years at any time in the first year; and · a previous operation of subsection (4) does not determine your non-concessional contributions cap for the first year. Therefore, a person who is under 65 years of age who makes non-concessional contributions during the income year that exceed the non-concessional contributions cap specified under subsection 292-85(2) of the ITAA 1997, would trigger the bring-forward provisions and their non-concessional cap would be calculated in accordance with subsection 292-85(4). In this case, in the 2011-12 (the first year) income year you are under 65 years of age, have not already triggered the bring forward provision and intend to make non-concessional contributions in excess of $150,000 and up to $450,000. Therefore, you will be eligible for and trigger the bring-forward provisions in the 2011-12 income year. This means your two future years' entitlements up to the bring forward residual amount can be made in the 2012-13 and 2013-14 income years without breaching the non-concessional contributions caps for those income years. Please note, rules on wether a regulated superannuation fund is able to accept contributions is determined under the Superannuation Industry (Supervision) Act 1993 (SISA) and the Superannuation Industry (Supervision) Regulations 1994 (SISR).

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | You have not already triggered the bring forward provision. | You intend to make non-concessional contributions in excess of $150,000 and up to $450,000 in the 2011-12 income year.