As we approach the end of the Financial Year, it is time to consider the new thresholds that will come into effect from 1 July 2024.

Concessional contribution cap to increase from 27,500 to $30,000. Concessional contributions are the sum of superannuation contributions that you or your employer makes and intend to claim as a tax deduction. These contributions will attract a 15% contribution tax on entry to the superannuation fund.

Non concessional contribution cap to increase from $110,000 to $120,000. Non concessional contributions are superannuation contributions which are not claimed as a tax deduction. Usually, members make these contributions on their own behalf to their superannuation fund. To make non concessional contributions you must be under the age of 75 and have less than $1,900,000 in superannuation assets (this is the sum of all superannuation funds).

Exclusions to these superannuation caps include downsizer contributions (where you sell your primary residence you have owned for 10 years or more), personal injury contributions, Government co-contributions and the small business capital gains tax concession which I will speak about later. These benefits are all exempt from the non-concessional cap.

Bring forward non concessional cap to increase from $330,000 to $360,000. You can bring forward three years of non-concessional contributions into one or two financial years subject to the balance of your superannuation. Briefly, as you get closer to $1,900,000 the amount you can bring forward reduces.

Transfer Balance Cap to remain at $1,900,000. The Transfer Balance Cap is the amount of superannuation that you can accumulate and can transfer into a tax exempt (pension) account.

Small business lifetime cap to increase to $1,780,000 from $1,705,000. This is a lifetime cap that applies specifically for business owners who rely upon the sale of their business to fund their retirement needs. This is a one-off payment is not subject to the superannuation contribution caps and is not subject to the Transfer Balance Cap. It allows small business owners to sell their business and contribute sale proceeds into their superannuation account.

As you can see there is considerable complexity associated with superannuation. While the benefits of superannuation are great, the cost of error is also great. We encourage you to seek advice when contemplating superannuation contribution strategies.